Exhibit 10.2
INVESTMENT SUBADVISORY
AGREEMENT
This INVESTMENT SUBADVISORY AGREEMENT (this "Agreement") is made and
entered into by and among MACC PRIVATE EQUITIES INC., a Delaware corporation
("MACC"), EUDAIMONIA ASSET MANAGEMENT, LLC, a California limited liability
company ("Eudaimonia") and INVESTAMERICA INVESTMENT ADVISORS, INC., a Delaware
corporation ("InvestAmerica"), dated as of the 29th day of April, 2008.
RECITALS
WHEREAS, MACC is a closed-end management investment company that has
elected to be regulated as business development company under the Investment
Company Act of 1940, as amended (the "1940 Act");
WHEREAS, MACC is subject to the terms of certain exemptive orders granted
by the United States Securities and Exchange Commission ("SEC") which govern,
among other things, co-investments by MACC and other investment funds managed by
any investment advisor to MACC (the "Exemptive Orders");
WHEREAS, Eudaimonia and InvestAmerica are both registered investment
advisors under the Investment Advisers Act of 1940, as amended (the "Advisers
Act");
WHEREAS, concurrently with the execution of this Agreement, Eudaimonia has
agreed to serve as the investment advisor to MACC pursuant to an Investment
Advisory agreement between Eudaimonia and MACC (the "Eudaimonia Advisory
Agreement");
WHEREAS, prior to the execution of this Agreement, InvestAmerica was the
investment advisor to MACC and its wholly-owned subsidiary, MorAmerica Capital
Corporation ("MorAmerica"), with respect to Existing Portfolio Company (as
defined below) investments;
WHEREAS, this Agreement is subject to approval by the holders of a
majority, as defined in the 1940 Act, of MACC's outstanding voting securities
and will become effective as of the date of such approval (the "Effective
Date");
WHEREAS, effective on the Effective Date, the investment advisory
agreements previously governing the investments in Existing Portfolio Companies
are terminated;
WHEREAS, Eudaimonia desires to obtain the support and assistance of
InvestAmerica in carrying out Eudaimonia's duties and obligations as the
investment advisor to MACC, and InvestAmerica desires to provide such support
and assistance as sub-advisor on the terms and conditions set forth herein; and
WHEREAS, this Agreement has been approved in accordance with the provisions
of the 1940 Act.
NOW, THEREFORE, in consideration of the mutual agreements and covenants set
forth in this Agreement, the parties agree as follows:
1. Existing Porfolio Company, Defined. "Existing Portfolio Company" or
"Existing Portfolio Companies" shall mean any entity in which MACC or MorAmerica
has made an investment prior to the Effective Date and with respect to which
InvestAmerica will be providing services pursuant hereto, which investments may
include ownership of capital stock, loans, receivables due from an Existing
Portfolio Company or other debtor on sale of assets acquired in liquidation and
assets acquired in liquidation of any Existing Portfolio Company.
2. Services.
2.1 Transitional Services. During the first three (3) months of the
term of this Agreement (the "Transitional Period"), InvestAmerica will
provide those financial, business and investment advisory services
specified on Schedule A (collectively referred to as the "Transitional
Services") to, or for the benefit of, MACC, subject to the oversight and
supervision of Eudaimonia and the direction and control of the Board of
Directors of MACC. Notwithstanding the foregoing, Eudaimonia and
InvestAmerica may agree to extend the Transitional Period for an additional
period of three (3) months.
2.2 Ongoing Services. For the remainder of the term of this Agreement
after the Transitional Period (as the same may be extended pursuant to
Section 2.1 above), InvestAmerica will provide those financial, business
and investment advisory services specified on Schedule B (collectively
referred to as the "Ongoing Services" and, together with the Transitional
Services, the "Services") to, or for the benefit of, MACC, subject to the
oversight and supervision of Eudaimonia and the direction and control of
the Board of Directors of MACC.
3. Term. This Agreement shall continue in effect for two (2) years from the
Effective Date, unless sooner terminated as provided for herein. Thereafter,
this Agreement shall continue in effect so long as such continuance is
specifically approved at least annually by Eudaimonia and the Board of Directors
of MACC, including a majority of its members who are not interested persons of
InvestAmerica or Eudaimonia, or by vote of the holders of a majority, as defined
in the 1940 Act, of MACC's outstanding voting securities. The foregoing
notwithstanding, this Agreement may be terminated by Eudaimonia or MACC at any
time, without payment of any penalty, on sixty (60) days' written notice to
InvestAmerica if the decision to terminate has been made by Eudaimonia or by
MACC's Board of Directors or by vote of the holders of a majority, as defined in
the 1940 Act, of MACC's outstanding voting securities. This Agreement also may
be terminated by InvestAmerica at any time, without payment of any penalty, on
sixty (60) days' written notice to Eudaimonia and MACC.
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4. Portfolio Board Service and Asset Management.
4.1 It is acknowledged that as a part of the Services to be provided
by InvestAmerica hereunder, (i) certain of its employees, representatives
and agents ("InvestAmerica Representatives") may serve as members of the
boards of directors and board committees of individual Portfolio Companies
and (ii) InvestAmerica will monitor and manage investments in Existing
Portfolio Companies, including exits, preparation of valuations and other
portfolio management matters. InvestAmerica and InvestAmerica
Representatives serving on the boards of directors and board committees of
individual Existing Portfolio Companies shall conduct the Services in
accordance with applicable law and all investment policies as set forth in
writing by Eudiamonia and the Board of Directors of MACC with respect to
such Services, provided that at all times the InvestAmerica Representatives
shall act in accordance with their fiduciary duties as members of Existing
Portfolio Company boards. In regard to such actions and decisions, MACC
hereby appoints InvestAmerica (and such officers, directors, employees,
representatives and agents is it shall designate) as its proxy, as a result
of which InvestAmerica shall have the authority, in its performance of this
Agreement, to make decisions and to take such actions, without specific
authority from Eudaimonia or the Board of Directors of MACC, as to all
matters which are not hereby restricted.
4.2 All fees, including director's fees that may be paid to
InvestAmerica by or for the account of an Existing Portfolio Company shall
be paid to MACC. Notwithstanding the foregoing, InvestAmerica will be
allowed to be reimbursed by Existing Portfolio Companies for all direct
expenses associated with due diligence and management of portfolio
investments or investment opportunities, including expenses of attending
board and management meetings, and such expenses (travel, meals, lodging,
etc.) will not be payable to, or by, Eudaimonia or credited against the
Management Fee.
4.3 Except for expense reimbursement provided in Section 4.2 above and
4.4 below, InvestAmerica's sole and exclusive compensation for all of its
services to be rendered hereunder will be in the form of a Management Fee
and a separate Incentive Fee as provided in Section 5.
4.4 InvestAmerica will be responsible for the following expenses: its
staff salaries and fringe benefits, office space, office equipment and
furniture, communications, travel, meals and entertainment, conventions,
seminars, office supplies, dues and subscriptions, hiring fees, moving
expenses, repair and maintenance, employment taxes, in-house accounting
expenses and minor miscellaneous expenses. InvestAmerica will pay for its
own account all expenses incurred in rendering the services to be rendered
hereunder. Without limiting the generality of the foregoing, InvestAmerica
will pay the salaries and other employee benefits of the persons in its
organization whom it may engage to render such services, including without
limitation, persons in its organization who may from time to time agree to
act as officers of MACC. Eudaimonia or MACC, however, will be responsible
for all reasonable expenses for
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travel at the direction of Eudaimonia or MACC, including for board or other
management meetings, which expenses shall be reimbursed promptly upon being
invoiced therefor by InvestAmerica. Without limiting the foregoing,
InvestAmerica will not be responsible for any expenses: (i) required to be
paid by MACC pursuant to the Eudaimonia Advisory Agreement (including,
without limitation, Section 2.3 thereof), (ii) any expenses related to
transferring management of MACC to Eudaimonia, including expenses of moving
records to the offices of Eudaimonia, (iii) expenses of duplicating files
necessary for performance of the Services; or (iv) any other expenses
incurred in connection with the services that are not expressly payable by
InvestAmerica under this Agreement.
4.5 The obligations of InvestAmerica to Eudaimonia and MACC are not
exclusive.
(a) InvestAmerica and its affiliates may, in their discretion,
manage other venture capital funds and render the same or similar
services to any other person or persons who may be making the same or
similar investments. Neither InvestAmerica nor any of its affiliates
shall in any manner be liable to Eudaimonia, MACC or their affiliates
by reason of the activities of InvestAmerica or its affiliates on
behalf of other persons and funds as described in this paragraph and
any conflict of interest arising therefrom is hereby expressly waived.
(b) The scope of the Services does not include presentation of
investment opportunities to MACC or making new investments for MACC,
but rather is limited to management of the Existing Portfolio
Companies. Accordingly, InvestAmerica is not required to present to
MACC investments being considered by other funds managed by
InvestAmerica or its affiliates.
(c) With respect to follow-on investments made by InvestAmerica
pursuant to this Agreement, any such investment management services
and all co-investments shall at all times be provided in strict
accordance with rules and regulations under the 1940 Act and the
Exemptive Orders.
5. Management and Incentive Fees.
5.1 During the Transitional Period, Eudaimonia will pay InvestAmerica
monthly in arrears a management fee (the "Transitional Management Fee")
equal to seventy-five percent (75%) of the management fee actually paid by
MACC to Eudaimonia pursuant to the Eudaimonia Advisory Agreement
attributable to Existing Portfolio Companies as of the Effective Date. For
the remainder of the term of this Agreement and to the extent the Agreement
is extended pursuant to the terms of this Agreement and the terms of the
1940 Act, Eudaimonia will pay InvestAmerica monthly in arrears a management
fee (the "Management Fee") equal to fifty percent (50%) of the management
fee actually paid by MACC to Eudaimonia pursuant to the Eudaimonia Advisory
Agreement attributable to Existing Portfolio Companies as of the Effective
Date.
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Eudaimonia shall arrange for the Transitional Management Fee or the
Management Fee, as applicable, to be paid to InvestAmerica directly by MACC
on the same day as MACC pays Eudaimonia its management fee under the
Eudaimonia Advisory Agreement, provided that Eudaimonia has received
payment of its management fee from MACC pursuant to the terms of the
Eudamonia Advisory Agreement. Payments of Transitional Management Fees or
Management Fees that are delayed because of failure of MACC to pay a
management fee to Eudaimonia for the corresponding period shall be made
promptly upon Eudaimonia receiving such management fee from MACC. The
Transitional Management Fee shall stop accruing as of the last day of the
Transitional Period. The Management Fee shall stop accruing on the date
that this Agreement expires or is terminated. Upon expiration or
termination of this Agreement, all earned but unpaid Transitional
Management Fees and Management Fees shall be immediately due and payable.
5.2 During the term of this Agreement Eudaimonia shall pay to
InvestAmerica an incentive fee determined as specified in this Section 5.2
(the "Incentive Fee").
(a) The Incentive Fee to be paid to InvestAmerica shall consist
of one hundred percent (100%) of the incentive fee actually paid by
MACC to Eudaimonia pursuant to the Eudaimonia Advisory Agreement
attributable to Existing Portfolio Companies as of the Effective Date.
(b) Upon termination of this Agreement, all earned but unpaid
Incentive Fees shall be immediately due and payable.
(c) Payment of Incentive Fees shall be made as follows:
(i) To the extent payable, Incentive Fees shall be paid, in
cash, in arrears on the last business day of each fiscal quarter
in the fiscal year.
(ii) The Incentive Fee shall be retroactively adjusted as
soon as practicable following completion of the valuations at the
end of each fiscal year in which this Agreement is in effect to
reflect the actual Incentive Fee due and owing to InvestAmerica,
and if such adjustment reveals that InvestAmerica has received
more Incentive Fee income than it is entitled to hereunder,
InvestAmerica shall promptly reimburse Eudaimonia for the amount
of the excess.
(d) The Incentive Fee shall stop accruing effective as of the
date of the expiration (subject, however, to annual continuance as
provided in Section 3 above) or termination of this Agreement. Upon
the expiration or termination of this Agreement, all earned but unpaid
Incentive Fees shall be immediately due and payable; provided,
however, that Incentive Fees earned with respect to non-cash Realized
Capital Gains (as
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defined in the Eudaimonia Advisory Agreement) shall not be due and
payable to InvestAmerica until the cash is received by MACC.
(e) To the extent payable, Eudaimonia shall arrange for the
Incentive Fee to be paid to InvestAmerica directly by MACC, on the
same date as MACC pays Eudaimonia its incentive fee under the
Eudaimonia Advisory Agreement, and in no event less than annually.
6. Personnel. All employee wages, benefits and other related costs for
employees and personnel of InvestAmerica shall be the sole responsibility of
InvestAmerica, and InvestAmerica shall have sole control of the payment of wages
and benefits to such employees. The individuals providing the Services shall at
all times be considered to be in the employ of InvestAmerica and under the
direction and control of InvestAmerica, and they shall not be considered to be
in the employ of Eudaimonia. No InvestAmerica personnel shall be required to
relocate. Without the prior written consent of InvestAmerica (which consent
InvestAmerica may grant or withhold in its sole and absolute discretion),
Eudaimonia agrees that it shall not, for a period of three (3) years from the
date of termination of this Agreement, either alone or in conjunction with any
other person, or directly or indirectly through its present or future
affiliates, employ, engage or seek to employ or engage any person who is an
employee of InvestAmerica.
7. Accounts and Records. InvestAmerica will maintain books of account and
other records and files with respect to the Services provided hereunder.
InvestAmerica shall make such records available for inspection by Eudaimonia
upon reasonable notice at mutually convenient times at the place where such
records are kept in the ordinary course of business.
8. Confidentiality. InvestAmerica agrees that it will come into possession
of information regarding the Portfolio Companies and information regarding other
companies, the securities of which are owned by other funds managed by one of
the parties ("Confidential Portfolio Information"), and information concerning
the business of the other parties to this Agreement ("Confidential Business
Information") (collectively, the Confidential Portfolio Information and
Confidential Business Information are referred to herein as "Confidential
Information"). Confidential Information shall not include information
independently developed by a party without reliance on the Confidential
Information of the other party, information obtained from a third party, which
third party is under no restriction with respect to the use and disclosure of
such information, or information approved for unrestricted release by a party
without violating a provision of this agreement.
InvestAmerica agrees that the Confidential Information is highly
confidential, private and of a sensitive nature. Eudaimonia and InvestAmerica
agree that each will handle the Confidential Information of the other with the
same degree of care that it uses to handle its own Confidential Information, and
will, at all times, handle the Confidential Information of the other in a manner
reasonably calculated to maintain its confidentiality. Each party understands
that the other may disclose Confidential Information as reasonably necessary:
(i) in the normal course of managing existing portfolios, (ii) in performing the
Services, (iii) in the performance of tasks by InvestAmerica as requested by
Eudaimonia and (iv) in communicating with shareholders,
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investors, and regulatory agencies, including the SEC. Eudaimonia and
InvestAmerica also agree that the parties may disclose Confidential Portfolio
Information to banks, financing sources, investment banks, brokers, auditors,
law firms and other service providers (i) as reasonably necessary in connection
with the management of an investment in a Portfolio Company, (ii) at the request
of the Portfolio Company who directs disclosure to third parties and (iii) as
reasonably necessary in connection with service as a director of a Portfolio
Company. InvestAmerica may also use and disclose information regarding IRR, cash
flow and other performance data for the Existing Portfolio and all other
historical performance data relating to the Existing Portfolio and prior
investments during the time InvestAmerica managed MACC. In addition, a party may
use and disclose the Confidential Information of the other party where required
by law, provided that it shall first notify the other party in writing of such
requirement and cooperate with respect to any reasonable steps available for the
further protection of such Confidential Information.
Except as otherwise provided herein, InvestAmerica agrees that it will use
the Confidential Information solely in the management of MACC or the management
of other funds that have co-investments with MACC.
InvestAmerica agrees that, in the event of any breach of any provision
hereof, the aggrieved party will not have an adequate remedy in money or damages
and that, in such event, the aggrieved party shall be entitled to obtain
injunctive relief against such breach in any court of competent jurisdiction,
without the necessity of posting a bond even if otherwise normally required.
Such injunctive relief will in no way limit the aggrieved party's right to
obtain other remedies available under applicable law.
9. Compliance with Laws; Cooperation.
9.1 InvestAmerica shall use diligent effort to cause all Services to
be performed in strict compliance with all laws, regulations and
requirements of any federal, state, municipal or other governmental entity
having jurisdiction respecting either of the parties and/or the Services
being rendered, including the 1940 Act, the Advisers Act and all Exemptive
Orders.
9.2 Eudaimonia shall cooperate fully with InvestAmerica's efforts to
perform the Services effectively and in compliance with applicable law,
including providing InvestAmerica with files and records necessary for the
performance of the Services.
10. Indemnification; Fidelity Bond, Directors and Officers Insurance.
10.1 Eudaimonia shall not be liable or responsible for any action or
omission on the part of InvestAmerica or its employees, representatives or
agents arising out of their respective service on the board of directors of
individual Portfolio Companies or provision of other Services pursuant to
this Agreement, except to the extent that such action or omission was
specifically directed by Eudaimonia, in writing. InvestAmerica shall
indemnify and hold Eudaimonia harmless from any claims or liabilities
arising out
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of the service of InvestAmerica and its employees, representatives and
agents on the boards of directors of individual Portfolio Companies or the
provision of other Services pursuant to this Agreement, except to the
extent that InvestAmerica or its employees, representatives or agents were
carrying out the express written instructions of Eudaimonia in connection
with the action or omission complained of.
10.2 InvestAmerica shall not be liable or responsible for any action
or omission on the part of Eudaimonia or its employees, representatives or
agents arising out of this Agreement or the Eudaimonia Advisory Agreement.
Eudaimonia shall indemnify and hold InvestAmerica harmless from any claims
or liabilities arising out of Eudaimonia's actions or omissions with
respect to this Agreement or the Eudaimonia Advisory Agreement.
10.3 During the term of this Agreement, InvestAmerica and its
officers, directors and employees, with respect to performance of the
Services under this Agreement and as officers or employees of MACC, if
applicable, shall be covered at all times by a (i) directors and officers
insurance policy and (ii) a joint fidelity bond, in each case at least as
extensive in amount, scope and coverage as required by law and as presently
in force (as long as reasonable commercially available), and at no cost to
InvestAmerica.
10.4 Neither InvestAmerica, nor any of its officers, directors,
shareholders, employees, agents or Affiliates, whether past, present or
future (collectively, the "Indemnified Parties"), shall be liable to
Eudaimonia or MACC, or any of their affiliates for any error in judgment or
mistake of law made by the Indemnified Parties in connection with any
investment made by or for MACC, provided such error or mistake was not made
in bad faith or as a result of gross negligence or willful misconduct of
the Indemnified Parties. MACC confirms that in performing services
hereunder Eudaimonia will be an agent of MACC for the purpose of the
indemnification provisions of the Bylaws of MACC subject, however, to the
same limitations as though the Indemnified Parties were a director or
officer of MACC. InvestAmerica shall not be liable to Eudaimonia, MACC,
their shareholders or their creditors, except for violations of law or for
conduct which would preclude the Indemnified Parties from being indemnified
under such Bylaw provisions. The indemnification provisions of this Section
9 are applicable to the entire period for which InvestAmerica has provided
advisory services to MACC or its predecessors, beginning in 1985. The
provisions of this Section 9(d) shall survive termination of this
Agreement.
11. Notices. All notices or other communications given pursuant to this
Agreement shall be in writing and shall be given by personal delivery, by United
States mail or an established, commercial express delivery service (such as
Federal Express), postage or delivery charge prepaid, return receipt requested,
addressed to the person and address designated below:
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InvestAmerica: InvestAmerica Investment Advisors, Inc.
000 Xxxxxx Xxxxxx X.X., Xxxxx 000
Xxxxx Xxxxxx XX 00000
Fax (000) 000-0000
Attn: Xxxxx X. Xxxxxxxx, President
Eudaimonia: Eudaimonia Asset Management, LLC
000 0xx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxxx, President
A notice or other communication shall be deemed received on the earliest of
the following: (i) the date of its delivery to the address specified above, (ii)
the date of its actual receipt by the person or entity specified above, or (iii)
in the case of refusal to accept or inability to deliver the notice or other
communication, the earliest of (a) the date of the attempted delivery or refusal
to accept delivery, (b) the date of the postmark on the return receipt, or (c)
the date of receipt of notice of refusal or notice of non-delivery by the
sending party.
Either party may designate any other address in substitution of the
foregoing address(es) at any time by giving the other party ten (10) days
written notice, as provided herein, of the new address.
12. Severability. If any term, covenant or condition of this Agreement or
the application thereof to any person or circumstance shall be invalid or
unenforceable, the remainder of this Agreement or such other documents, or the
application of such term, covenant or condition to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each term, covenant or condition of this Agreement or such
other documents shall be valid and shall be enforced.
13. No Joint Venture, Partnership or Alter Ego; Independent Contractor.
Nothing contained in this Agreement, any document executed in connection
herewith or any other agreement with any other party shall be construed as
making InvestAmerica and Eudaimonia partners, joint venturers or alter egos of
each other or of any other entity. InvestAmerica shall at all times remain an
independent contractor of Eudaimonia with respect to the Services.
14. Additional Documents. The parties hereby agree to execute and deliver
such other documents and instruments as may be necessary or desirable to give
effect to the terms and intent of this Agreement.
15. Waiver. The failure of any party to insist upon strict performance of
any of the provisions contained herein shall not be deemed a waiver of any
rights or remedies that such party may have, and shall not be deemed a waiver of
any subsequent breach or default.
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16. Captions and Headings. The captions and headings in this Agreement are
for ease of reference only and shall not be deemed to define or limit the scope
or intent of any of the terms, covenants, conditions or agreements contained
herein.
17. Entire Agreement. This Agreement contains the entire agreement between
and among the parties hereto and supersedes all prior negotiations and
agreements, oral or written, with respect to the subject matter hereof or with
respect to any of the Services.
18. Arm's-Length Agreement; Construction. The parties mutually acknowledge
that the provisions of this Agreement are the product of arm's-length
negotiations with parties having essentially equal bargaining strength, legal
representation and opportunity to determine the language used herein. Therefore,
the provisions of this Agreement shall not be construed for or against any
party.
19. No Third-Party Beneficiary Rights. This Agreement is not intended to
create, nor shall it be in any way construed to create any third-party
beneficiary rights in any person not a party hereto.
20. Successors and Assigns. This Agreement shall inure to the benefit of
and bind the respective parties' successors and assigns.
21. Applicable Law. This Agreement is made and delivered in, and shall be
construed and interpreted in accordance with the laws (without reference to the
choice-of-law provisions) of, the State of Delaware.
22. Amendment. This Agreement may be amended only in writing executed by
all parties.
[signature page immediately follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
EUDAIMONIA:
EUDAIMONIA ASSET MANAGEMENT, LLC
A California limited liability company
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
---------------------------------------
Title: President and CEO
-----------------------------------------------
INVESTAMERICA:
INVESTAMERICA INVESTMENT ADVISORS, INC.
A Delaware corporation
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxxx
President
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Xxxxxx X. Xxxxx
Executive Vice President
MACC:
MACC PRIVATE EQUITIES, INC.
A Delaware corporation
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxxx
President
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Xxxxxx X. Xxxxx
Executive Vice President
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Schedule A
TRANSITIONAL SERVICES
To Be Provided by InvestAmerica and by Eudaimonia
I. EXISTING PORTFOLIO COMPANY MANAGEMENT TASKS
1. Gather, review, file, summarize monthly financials relating to
portfolio investments existing as of the Existing Date (the "Existing
Portfolio").
2. Report sales, pre tax, EBITDA actual vs. budget monthly.
3. Attend Existing Portfolio company board meetings.
4. Review and file projections.
5. Review and file annual audits.
6. Review covenant compliance.
7. Explore ways to add value i.e. explore growth and acquisition
opportunities and plans, assess management and new management
candidates.
8. Work to execute exit projections.
9. Communicate and work with co-investors to assess and add value.
10. Analyze and recommend investment opportunities for the Existing
Portfolio companies.
11. Support senior capital and venture capital acquisition as required for
Existing Portfolio companies.
12. File all company monitoring information.
13. File all investment documentation.
14. In Existing Portfolio board roles, act in accord with proper corporate
governance guidelines, all in the interest of the Existing Portfolio
company and its shareholders.
15. Make available and, if requested by Existing Portfolio companies,
render managerial assistance to, and exercise management rights in,
Existing Portfolio companies and entities as appropriate to maximize
return for MACC and to comply with applicable SEC regulations.
II. SEC EXAMINATIONS; SECURITIES CUSTODY
1. Eudaimonia is responsible as investment advisor of MACC; InvestAmerica
provides SEC exam assistance on any inquiries related to pre-Effective
Date or Existing Portfolio activities.
2. Eudaimonia is responsible for custody of all assets (cash, securities,
et al) which are subject to SEC custody rules under the 1940 Act and
the Advisers Act. InvestAmerica to provide custody support as long as
assets are held at CRBT.
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III. ACCOUNTING FOR MACC
1. Prepare monthly financial statements and quarterly report for MACC and
MorAmerica during the Transition Period.
2. Eudaimonia will be responsible for controls, check writing, wire
instructions and approval of expenses. These tasks will be
transitioned by InvestAmerica to Eudaimonia over the Transition
Period.
3. Prepare quarterly and annual valuation reports, provide valuation
analysis and support to MACC board of directors.
4. Monthly Existing Portfolio accounting and bookkeeping records.
5. Audit support for the Existing Portfolio records and for pre-Effective
Date Activities. 6. Prepare quarterly management letter on Existing
Portfolio. 7. Prepare monthly performance report with respect to
Existing Portfolio. 8. Prepare cashflows projection (1 year out) for
Existing Portfolio
IV. SHAREHOLDER RELATIONS / ANNUAL REPORT
1. Eudaimonia responsible for all shareholder relations, communications
and inquiries.
2. Eudaimonia will prepare Annual Reports, with Existing Portfolio
financial input from InvestAmerica.
V. EXISTING PORTFOLIO FOLLOW-ON INVESTMENTS
1. InvestAmerica responsible for analysis, presentation, proposal,
gathering, filing investment documentation.
2. Eudaimonia responsible for investment decisions.
3. MACC Board responsible for any co-investment split decisions.
VI. BOARD MEETINGS
1. Eudaimonia responsible.
2. InvestAmerica will provide Existing Portfolio;
o Quarterly Management Letter
o Monthly Portfolio Performance Report
o Quarterly Valuations
InvestAmerica is not responsible for out-of-pocket expenses (travel, meals,
etc.) associated with the administration of this Agreement that are not
associated with managing the Existing Portfolio. InvestAmerica is not
responsible for the cost of travel to the offices of Eudamonia required under
the Agreement.
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VII. FINANCIAL PROJECTIONS
1. InvestAmerica responsible for annual projection inputs with regard to
the Existing Portfolio and expenses under its control and for interim
projection inputs as reasonably required.
2. Eudaimonia responsible for MACC financial projections.
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Schedule B
ONGOING SERVICES
To Be Provided by InvestAmerica and by Eudaimonia
I. EXISTING PORTFOLIO COMPANY MANAGEMENT TASKS
1. Gather, review, file, summarize monthly financials relating to
portfolio investments existing as of the Existing Date (the "Existing
Portfolio").
2. Report sales, pre tax, EBITDA actual vs. budget monthly.
3. Attend Existing Portfolio company board meetings.
4. Review and file projections.
5. Review and file annual audits.
6. Review covenant compliance.
7. Explore ways to add value i.e. explore growth and acquisition
opportunities and plans, assess management and new management
candidates.
8. Work to execute exit projections.
9. Communicate and work with co-investors to assess and add value.
10. Analyze and recommend investment opportunities for the Existing
Portfolio companies.
11. Support senior capital and venture capital acquisition as required for
Existing Portfolio companies.
12. File all company monitoring information.
13. File all investment documentation.
14. In Existing Portfolio board roles, act in accord with proper corporate
governance guidelines, all in the interest of the Existing Portfolio
company and its shareholders.
15. Make available and, if requested by Existing Portfolio companies,
render managerial assistance to, and exercise management rights in,
Existing Portfolio companies and entities as appropriate to maximize
return for MACC and to comply with applicable SEC regulations.
II. SEC EXAMINATIONS; SECURITIES CUSTODY
1. Eudaimonia is responsible as investment advisor of MACC; InvestAmerica
provides SEC exam assistance on any inquiries related to pre-Effective
Date or Existing Portfolio activities.
2. Eudaimonia responsible for custody of all assets (cash, securities, et
al) which are subject to SEC custody rules under the 1940 Act and the
Advisers Act. InvestAmerica to provide custody support as long as
assets are held at CRBT.
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III. ACCOUNTING FOR MACC
1. Eudaimonia will be responsible for controls, check writing, wire
instructions and approval of expenses. These tasks will be
transitioned by InvestAmerica to Eudaimonia over the Transition
Period.
2. Prepare quarterly and annual valuation reports, provide valuation
analysis and support to MACC board of directors.
3. Monthly Existing Portfolio accounting and bookkeeping records.
4. Audit support for the Existing Portfolio records and for pre-Effective
Date Activities.
IV. SHAREHOLDER RELATIONS / ANNUAL REPORT
1. Eudaimonia responsible for all shareholder relations, communications
and inquiries.
2. Eudaimonia will prepare Annual Reports, with Existing Portfolio
financial input from InvestAmerica.
V. EXISTING PORTFOLIO FOLLOW-ON INVESTMENTS
1. InvestAmerica responsible for analysis, presentation, proposal,
gathering, filing investment documentation.
2. Eudaimonia responsible for investment decisions.
3. MACC Board responsible for any co-investment split decisions.
VI. BOARD MEETINGS
1. Eudaimonia responsible.
2. InvestAmerica will provide Existing Portfolio;
o Quarterly Management Letter
o Monthly Portfolio Performance Report
o Quarterly Valuations
InvestAmerica is not responsible for out-of-pocket expenses (travel, meals,
etc.) associated with the administration of this Agreement that are not
associated with managing the Existing Portfolio. InvestAmerica is not
responsible for the cost of travel to the offices of Eudamonia required under
the Agreement.
VII. FINANCIAL PROJECTIONS
1. InvestAmerica responsible for annual projection inputs with regard to
the Existing Portfolio and expenses under its control and for interim
projection inputs as reasonably required.
2. Eudaimonia responsible for MACC financial projections.
