Exhibit (d)(1)
SELECT TEN PLUS FUND, LLC
MANAGEMENT AGREEMENT
Agreement, made this ___ day of _________, 1998 between Select Ten Plus
Fund, LLC, (the "Fund") a Delaware limited liability company, and Integrity
Capital Advisors, Inc., a Delaware corporation (the ADVISER).
W I T N E S S ET H
WHEREAS, the Fund is a mutual fund registered under the Investment Company
Act of 1940, as amended (the 1940 ACT); and
WHEREAS, the units of beneficial interest of the Fund are divided into
separate divisions or portfolios (each, a PORTFOLIO), each of which is
established pursuant to a resolution of the Board of Managers of the Fund, and
the Board of Managers may from time to time terminate such Portfolios or
establish and terminate additional Portfolios; and
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the ADVISERS ACT); and
WHEREAS, the Fund desires to retain the Adviser to render or contract to
obtain as hereinafter provided investment advisory and supervisory services to
the Fund and the Fund also desires to avail itself of the facilities available
from the Adviser with respect to the administration of the Fund's day to day
business affairs, and the Adviser is willing to render or contract for such
investment advisory, supervisory and administrative services;
NOW, THEREFORE, the parties agree as follows:
1. APPOINTMENT OF ADVISER. The Fund hereby appoints the Adviser to act as
manager of the Fund and administrator of its business affairs for the
period and on the terms set forth in this Agreement. The Adviser accepts
such appointment and agrees to render the services herein described, for
the compensation herein provided. The Adviser is authorized to enter into
one or more sub-advisory agreements (each, a SUB-ADVISORY AGREEMENT) with a
registered investment adviser (each, a SUB-ADVISER) pursuant to which the
Adviser delegates to the Sub-Adviser its obligations for providing
investment advisory and certain other services in connection with one or
more of the Portfolios; provided, that the Adviser, and not the Fund, shall
be responsible for any compensation payable under any Sub-Advisory
Agreement. Any such Sub-Advisory Agreement may be entered into by the
Adviser on such terms and in such manner as may be permitted by the 1940
Act and the rules thereunder. For each Portfolio for which the Adviser has
entered into a Sub-Advisory Agreement, the Sub-Adviser shall have
the primary responsibility for providing investment advisory services as
set forth in Section 2 and shall be responsible for broker-dealer selection
as set forth in Section 3 and maintaining books and records as set forth in
Section 4, and the Adviser will have supervisory responsibility for
investment advisory services furnished by the Sub-Adviser pursuant to the
Sub-Advisory Agreement. The Adviser will review the performance of the
Sub-Adviser and make recommendations to the Board of Managers of the Fund
with respect to the retention and renewal of the Sub-Advisory Agreement.
2. INVESTMENT ADVISORY SERVICES. Subject to the supervision of the Fund's
Board of Managers, and in compliance with each Portfolio's investment
objectives and policies, the Adviser will provide an investment program for
each Portfolio and determine the composition of the assets of each
Portfolio, including determination of the purchase, retention or sale of
the securities, cash, and other investments contained in such Portfolio's
holdings. The Adviser is hereby authorized to execute and perform such
services, or to arrange for execution and performance of such services, on
behalf of each Portfolio. To the extent, if any, permitted by the
investment policies of a Portfolio, the Adviser shall make determinations
as to and execute and perform futures contracts and options on behalf of
such Portfolio. The Adviser will provide the services under this Agreement
in accordance with each Portfolio's investment objective or objectives,
policies, procedures and restrictions as stated in the Fund's Registration
Statement, as amended from time to time (the REGISTRATION STATEMENT), filed
with the Securities and Exchange Commission (the SEC) and any other
documents that set forth investment policies, procedures or restrictions
governing the Portfolio.
The Adviser further agrees as follows:
(a) The Adviser will manage each Portfolio so as to ensure compliance
by such Portfolio with the diversification requirements of
Section 817(h) of the Internal Revenue Code of 1986 and
regulations issued thereunder. In managing the Portfolio in
accordance with these requirements, the Adviser shall be entitled
to receive and act upon advice of counsel.
(b) In undertaking its duties under this Agreement, the Adviser will
comply with the 1940 Act and all rules and regulations
thereunder, all other applicable federal and state laws and
regulations, with any applicable procedures adopted by the Fund's
Board of Managers of which it has notice and the provisions of
the Registration Statement.
(c) On occasions when the Adviser deems the purchase or sale of a
security to be in the best interest of a Portfolio as well as of
the Adviser's or the Adviser's affiliates' other investment
advisory clients, the Adviser may, to the extent permitted by
applicable laws and regulations, but shall not be obligated to,
aggregate the securities to be so sold or purchased with those of
its other clients where such aggregation is not inconsistent with
the policies set forth in the Registration Statement. In such
event, the Adviser will
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allocate the securities so purchased or sold, as well as the
expenses incurred in the transaction, in a manner that is fair
and equitable in the Adviser's judgment in the exercise of the
Adviser's fiduciary obligations to the Fund and to such other
clients.
(d) In connection with the purchase and sale of securities for each
Portfolio, the Adviser will arrange for the transmission to the
custodian, transfer agent, dividend disbursing agent and
recordkeeping agent for the Fund (such custodian and agent or
agents hereinafter collectively referred to as the AGENT), on a
daily basis, such confirmations, trade tickets (which shall state
industry classifications unless the Adviser has previously
furnished a list of classifications for portfolio securities),
and other documents and information, including, but not limited
to, Cusip or other numbers that identify securities to be
purchased or sold on behalf of each Portfolio as may be
reasonably necessary to enable the Agent to perform their
administrative and recordkeeping responsibilities with respect to
such Portfolio. With respect to portfolio securities to be
purchased or sold through the Depository Trust Company, the
Adviser will arrange for the automatic transmission of the
confirmation of such trades to the Fund's Agent.
(e) The Adviser will monitor on a daily basis, by review of daily
pricing reports provided by the Agent to the Adviser, the
determination by the Agent for the Fund of the valuation of
portfolio securities and other investments of each Portfolio. The
Adviser shall not be obligated to independently verify the
Agent's pricing determinations, and the Agent's responsibility
for accurate pricing determinations of the value of the
Portfolio's securities shall not be reduced by the Adviser's duty
to monitor such determinations. The Adviser will assist the Agent
in determining or confirming, consistent with the procedures and
policies stated in the Registration Statement, the value of any
portfolio securities or other assets of each Portfolio for which
the Agent seeks assistance from or identifies for review by the
Adviser.
(f) The Adviser will make available to the Fund, promptly upon
request, all of each Portfolio's investment records and ledgers
maintained by the Adviser as are necessary to assist the Fund to
comply with requirements of the 1940 Act and the Advisers Act, as
well as other applicable laws. The Adviser will furnish to
regulatory authorities having the requisite authority any
information or reports in connection with its services which may
be requested in order to ascertain whether the operations of the
Fund are being conducted in a manner consistent with applicable
laws and regulations.
(g) The Adviser will provide reports, which may be prepared by the
Agent, to the Fund's Board of Managers for consideration at
meetings of the Board on the
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investment program for each Portfolio and the issuers and
securities represented in each Portfolio's securities holdings,
including a schedule of the investments and other assets held in
such Portfolio and a statement of all purchases and sales for
each Portfolio since the last such statement, and will furnish
the Fund's Board of Managers with periodic and special reports
with respect to each Portfolio as the Managers may reasonably
request, including statistical information with respect to the
Portfolio's securities.
3. BROKER-DEALER SELECTION. The Adviser is responsible for decisions to buy or
sell securities and other investments for each Portfolio, broker-dealer and
futures commission merchants' selection, and negotiation of brokerage
commission and futures commission merchants' rates. As a general matter, in
executing portfolio transactions, the Adviser may employ or deal with such
broker-dealers or futures commission merchants as may, in the Adviser's
best judgment, provide prompt and reliable execution of the transactions at
favorable prices and reasonable commission rates. In selecting such
broker-dealers or futures commission merchants, the Adviser shall consider
all relevant factors, including price (including the applicable brokerage
commission, dealer spread or futures commission merchant rate), the size of
the order, the nature of the market for the security or other investment,
the timing of the transaction, the reputation, experience and financial
stability of the broker-dealer or futures commission merchant involved, the
quality of the service, the difficulty of execution, and the execution
capabilities and operational facilities of the firm involved, and, in the
case of securities, the firm's risk in positioning a block of securities.
Subject to such policies as the Board of Managers may determine and
consistent with Section 28(e) of the Securities Exchange Act of 1934, as
amended (the 1934 ACT), the Adviser shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of the Adviser's having caused a Portfolio to
pay a member of an exchange, broker or dealer an amount of commission for
effecting a securities transaction in excess of the amount of commission
another member of an exchange, broker or dealer would have charged for
effecting that transaction, if the Adviser determines in good faith that
such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such member of an exchange,
broker or dealer viewed in terms of either that particular transaction or
the Adviser's overall responsibilities with respect to such Portfolio and
to the other clients as to which the Adviser exercises investment
discretion. In accordance with Section 11(a) of the 1934 Act and Rule
lla2-2('I') thereunder, and subject to any other applicable laws and
regulations including Section 17(e) of the 1940 Act and Rule 17e-1
thereunder, the Adviser may engage its affiliates, or any Sub-Adviser to
the Fund and its respective affiliates, as broker-dealers or futures
commission merchants to effect portfolio transactions in securities and
other investments for a Portfolio.
4. BOOKS AND RECORDS. The Adviser shall keep the Fund's books and records
required to be maintained by it pursuant to this Agreement, the 1940 Act or
otherwise. The Adviser agrees that all records which it maintains for the
Fund are the property of the Fund and it will surrender promptly to the
Fund any such records upon the Fund's request, provided however
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that the Adviser may retain a copy of such records. The Adviser further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940
Act any such records as are required to be maintained by the Adviser
hereunder.
5. ADMINISTRATIVE AND SUPERVISORY SERVICES.
(a) The Adviser will coordinate all matters relating to the functions of
the Portfolios' Sub-Adviser, if any, Agent, accountants, attorneys,
and other parties performing services or operational functions for the
Portfolios.
(b) The Adviser will furnish without cost to the Fund, or pay the cost of,
such office space, office equipment and office facilities as are
adequate for the Fund's needs.
(c) The Adviser will provide, without remuneration from or other cost to
the Fund, the services of a sufficient number of individuals competent
to perform all of the Fund's executive, administrative and clerical
functions as are necessary to ensure compliance with federal
securities laws as well as other applicable laws and to provide
effective supervision and administration of the Portfolios and which
are not performed by employees or other agents engaged by the Fund or
by the Adviser acting in some other capacity pursuant to a separate
agreement or arrangement with the Fund. The Adviser shall authorize
and permit any of its directors, officers and employees who may be
elected as a member of the Board of Managers or officers of the Fund
to serve in the capacities in which they are elected without any
remuneration from the Fund.
(d) The Adviser will assist in the preparation of all periodic reports to
the unitholders of the Fund and all reports and filings required to
maintain the registration and qualification of the Fund's units, or to
meet other regulatory or tax requirements applicable to the Fund,
under federal and state securities and tax laws.
(e) The Adviser shall prepare, or cause the preparation of, and, after
approval by the Fund, arrange for the filing of such registration
statements and other documents with the SEC and other federal and
state regulatory authorities as may be required by applicable law.
(f) The Adviser shall take such other action with respect to the
Portfolios, after approval by the Fund, as may bc required by
applicable law, including without limitation the rules and regulations
of the SEC and of state securities or insurance commissions and other
regulatory agencies.
(g) The Adviser shall make its officers and employees available to the
Board of Managers and officers of the Fund and Sub-Adviser for
consultation and discussions regarding the supervision and
administration of the Portfolios.
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6. EXPENSES.
(a) During the term of this Agreement, the Adviser shall pay, or cause a
Sub-Adviser to pay, the following expenses:
(i) The salaries and expenses of all personnel of the Fund and the
Adviser except the fees and expenses of members of the Board of
Managers who are not "interested persons" (within the meaning
of the 0000 Xxx) of the Fund, the Adviser, National Integrity
Life Insurance Company ("National Integrity"), or any
Sub-Adviser;
(ii) All expenses reasonably incurred by the Adviser in connection
with providing the services described above, including the
provision of office space, office equipment, office facilities,
and executive, administrative and clerical personnel in
accordance with paragraph 2(i) hereof, but excluding the
expenses described below to be assumed by the Fund;
(iii) The fees of any Sub-Adviser pursuant to a Sub-Advisory
Agreement; and
(iv) The costs and expenses payable by any Sub-Adviser pursuant to a
Sub-Advisory Agreement.
(b) Each Portfolio is responsible for and bears all expenses incurred in
its operation that are not specifically assumed by the Adviser or ARM
Securities Corp., the Fund's distributor, pursuant to the Distribution
Agreement with the Fund. General expenses of the Fund not readily
identifiable as belonging to one of the Portfolios will be allocated
among the Portfolios by or under the direction of the Fund's Board of
Managers in such manner as the Board shall determine to be fair and
equitable. Expenses borne by each Portfolio include, but are not
limited to, the following (or the Portfolio's allocated share of the
following):
(i) The cost (including brokerage commissions, if any) of
securities purchased or sold by the Portfolio and any losses
incurred in connection therewith;
(ii) Investment management fees due hereunder (but not sub-advisory
fees, which are payable by the Adviser);
(iii) Organizational expenses;
(iv) Filing fees and expenses relating to the registration and
qualification of the Fund or the units of a Portfolio under
federal or state securities laws and maintenance of such
registrations and qualifications;
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(v) Fees and expenses payable to the members of the Board of
Managers who are not "interested persons" of the Fund or the
Adviser, National Integrity or any Sub-Adviser;
(vi) Taxes (including any income or franchise taxes) and
governmental fees;
(vii) Costs of any liability, directors' and officers', uncollectible
items of deposit and other insurance and fidelity bonds;
(viii) Legal, accounting and auditing expense;
(ix) Charges of custodians, transfer agents and other agents;
(x) Expenses of setting in type and providing a camera-ready copy
of prospectuses and supplements thereto, expenses of setting in
type and printing or otherwise reproducing statements of
additional information and supplements thereto and reports and
proxy materials for existing unitholders;
(xi) Any extraordinary expenses (including fees and disbursements of
counsel) incurred by the Fund or Portfolio;
(xii) Fees, voluntary assessments and other expenses incurred in
connection with membership in investment company organizations;
and
7. COMPENSATION. For the services provided and the expenses assumed pursuant
to this Agreement, each Portfolio will pay to the Adviser as full
compensation therefor a fee at an annual rate of .50% of the average daily
net assets of each Portfolio. This fee will be deducted from the assets of
each respective Portfolio and paid to the Adviser monthly, but will be
accrued daily for purposes of determining the value of each Portfolio on
each day the New York Stock Exchange is open for trading.
8. LIABILITY. Except as may otherwise be required by the 1940 Act and the
rules and regulations thereunder, the Adviser, any of its affiliated
persons and each person, if any, who, within the meaning of Section 15 of
the Securities Act of 1933, as amended, controls the Adviser, shall not be
liable for, or subject to any damages, expenses, or losses in connection
with, any act or omission connected with or arising out of any services
rendered under 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 from reckless disregard of its duties and obligations under
this Agreement.
9. TERM. Unless sooner terminated, this Agreement shall continue in effect for
two years and thereafter for successive one year periods, provided that
such continuance is specifically approved at least annually in conformity
with the requirements of the 1940 Act; provided,
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however, that this Agreement may be terminated by the Fund or any Portfolio
thereof (with respect to such Portfolio) at any time, without the payment
of any penalty, by the Board of Managers of the Fund or by vote of a
majority of the outstanding voting securities (as defined in the 0000 Xxx)
of a Portfolio, or by the Adviser at any time, without the payment of any
penalty, upon not less than 60 days' prior written notice to the other
party. This Agreement shall terminate automatically in the event of its
assignment (as defined in the 1940 Act).
10. NON-EXCLUSIVITY. Nothing in this Agreement shall limit or restrict the
right of any director, officer or employee of the Adviser who may also be a
member of the Board of Managers, officer or employee of the Fund 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 business, whether of a similar or
dissimilar nature, nor limit or restrict the right of the Adviser to engage
in any other business or to render services of any kind to any other
corporation, firm, individual or association.
11. AMENDMENTS. This Agreement may be amended by mutual consent in writing, but
the consent of the Fund must be obtained in conformity with the
requirements of the 1940 Act.
12. NOTICES. Any notice or other communication required to be given pursuant to
this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (1) to the Adviser at 000 Xxxx Xxxxxx
Xxxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: President; or (2)
to the Fund at 000 Xxxx Xxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxxxxxxx
00000, Attention: President.
13. CHOICE OF LAW. Except insofar as the 1940 Act or other federal laws and
regulations may be controlling, this Agreement shall be governed by, and
construed and enforced in accordance with, the internal laws of the State
of Kentucky.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties hereto and supersedes any prior agreement with respect to the
subject matter hereof whether oral or written.
15. COUNTERPARTS. This Agreement may be executed in counterparts, and each
counterpart shall for all purposes be deemed an original, and all such
counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
SELECT TEN PLUS FUND, LLC
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By
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INTEGRITY CAPITAL ADVISORS, INC.
By
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