TRUST FOR PROFESSIONAL MANAGERS INVESTMENT ADVISORY AGREEMENT Ascentia Long/Short Fund
Ascentia
Long/Short Fund
THIS
INVESTMENT ADVISORY AGREEMENT
is made
as of the25th day of August, 2005, by and between Trust for Professional
Managers, (hereinafter called the “Trust”), on behalf of Ascentia Long/Short
Fund (the “Fund”), a series of the Trust, and Ascentia Capital Partners, LLC
(hereinafter called the “Advisor;”).
WITNESSETH:
WHEREAS,
the
Trust is an open-end management investment company, registered as such under
the
Investment Company Act of 1940 (the “Investment Company Act”); and
WHEREAS,
the
Fund is series of the Trust having separate assets and liabilities; and
WHEREAS,
the
Advisor is registered as an investment adviser under the Investment Advisers
Act
of 1940 (the “Advisers Act”) and is engaged in the business of supplying
investment advice as an independent contractor; and
WHEREAS,
the
Trust desires to retain the Advisor to render advice and services to the
Fund
pursuant to the terms and provisions of this Agreement, and the Advisor desires
to furnish said advice and services;
NOW,
THEREFORE,
in
consideration of the covenants and the mutual promises hereinafter set forth,
the parties to this Agreement, intending to be legally bound hereby, mutually
agree as follows:
1.
APPOINTMENT OF ADVISOR.
The
Trust hereby employs the Advisor and the Advisor hereby accepts such employment,
to render investment advice and related services with respect to the assets
of
the Fund for the period and on the terms set forth in this Agreement, subject
to
the supervision and direction of the Trust’s Board of Trustees.
2.
DUTIES OF ADVISOR.
(a)
GENERAL
DUTIES.
The
Advisor shall act as investment adviser to the Fund and shall supervise
investments of the Fund on behalf of the Fund in accordance with the investment
objectives, policies and restrictions of the Fund as set forth in the Fund’s and
Trust’s governing documents, including, without limitation, the Trust’s
Agreement and Declaration of Trust and By-Laws; the Fund’s prospectus, statement
of additional information and undertakings; and such other limitations, policies
and procedures as the Trustees may impose from time to time in writing to
the
Advisor. In providing such services, the Advisor shall at all times adhere
to
the provisions and restrictions contained in the federal securities laws,
applicable state securities laws, the Internal Revenue Code, the Uniform
Commercial Code and other applicable law.
Without
limiting the generality of the foregoing, the Advisor shall: (i) furnish
the
Fund with advice and recommendations with respect to the investment of the
Fund’s assets and the purchase and sale of portfolio securities for the Fund,
including the taking of such steps as may be necessary to implement such
advice
and recommendations (i.e.,
placing the orders); (ii) manage and oversee the investments of the Fund,
subject to the ultimate supervision and direction of the Trust’s Board of
Trustees; (iii) vote proxies for the Fund, file ownership reports under Section
13 of the Securities Exchange Act of 1934 for the Fund, and take other actions
on behalf of the Fund; (iv) maintain the books and records required to be
maintained by the Fund except to the extent arrangements have been made for
such
books and records to be maintained by the administrator or another agent
of the
Fund; (v) furnish reports, statements and other data on securities, economic
conditions and other matters related to the investment of the Fund’s assets
which the Fund’s administrator or distributor or the officers of the Trust may
reasonably request; and (vi) render to the Trust’s Board of Trustees such
periodic and special reports with respect to each Fund’s investment activities
as the Board may reasonably request, including at least one in-person appearance
annually before the Board of Trustees.
(b)
BROKERAGE.
The
Advisor shall be responsible for decisions to buy and sell securities for
the
Fund, for broker-dealer selection, and for negotiation of brokerage commission
rates, provided that the Advisor shall not direct orders to an affiliated
person
of the Advisor without general prior authorization to use such affiliated
broker
or dealer by the Trust’s Board of Trustees. The Advisor’s primary consideration
in effecting a securities transaction will be execution at the most favorable
price. In selecting a broker-dealer to execute each particular transaction,
the
Advisor may take the following into consideration: the best net price available;
the reliability, integrity and financial condition of the broker-dealer;
the
size of and difficulty in executing the order; and the value of the expected
contribution of the broker-dealer to the investment performance of the Fund
on a
continuing basis. The price to the Fund in any transaction may be less favorable
than that available from another broker-dealer if the difference is reasonably
justified by other aspects of the portfolio execution services offered.
Subject
to such policies as the Board of Trustees of the Trust may determine and
consistent with Section 28(e) of the Securities Exchange Act of 1934, as
amended, the Advisor shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason
of its
having caused the Fund to pay a broker or dealer that provides (directly
or
indirectly) brokerage or research services to the Advisor an amount of
commission for effecting a portfolio transaction in excess of the amount
of
commission another broker or dealer would have charged for effecting that
transaction, if the Advisor 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 broker or dealer, viewed in terms of either that
particular transaction or the Advisor’s overall responsibilities with respect to
the Trust. Subject to the same policies and legal provisions, the Advisor
is
further authorized to allocate the orders placed by it on behalf of the Fund
to
such brokers or dealers who also provide research or statistical material,
or
other services, to the Trust, the Advisor, or any affiliate of either. Such
allocation shall be in such amounts and proportions as the Advisor shall
determine, and the Advisor shall report on such allocations regularly to
the
Trust, indicating the broker-dealers to whom such allocations have been made
and
the basis therefor.
On
occasions when the Advisor deems the purchase or sale of a security to be
in the
best interest of the Fund as well as of other clients, the Advisor, to the
extent permitted by applicable laws and regulations, may aggregate the
securities to be so purchased or sold in order to obtain the most favorable
price or lower brokerage commissions and the most efficient execution. In
such
event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Advisor in the
manner
it considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to such other clients.
3.
REPRESENTATIONS OF THE ADVISOR.
(a)
The
Advisor shall use its best judgment and efforts in rendering the advice and
services to the Fund as contemplated by this Agreement.
(b)
The
Advisor shall maintain all licenses and registrations necessary to perform
its
duties hereunder in good order.
(c)
The
Advisor shall conduct its operations at all times in conformance with the
Advisers Act, the Investment Company Act , and any other applicable state
and/or
self-regulatory organization regulations.
4.
INDEPENDENT CONTRACTOR.
The
Advisor shall, for all purposes herein, be deemed to be an independent
contractor, and shall, unless otherwise expressly provided and authorized
to do
so, have no authority to act for or represent the Trust or the Fund in any
way,
or in any way be deemed an agent for the Trust or for the Fund. It is expressly
understood and agreed that the services to be rendered by the Advisor to
the
Fund under the provisions of this Agreement are not to be deemed exclusive,
and
the Advisor shall be free to render similar or different services to others
so
long as its ability to render the services provided for in this Agreement
shall
not be impaired thereby.
5.
ADVISOR’S PERSONNEL.
The
Advisor shall, at its own expense, maintain such staff and employ or retain
such
personnel and consult with such other persons as it shall from time to time
determine to be necessary to the performance of its obligations under this
Agreement. Without limiting the generality of the foregoing, the staff and
personnel of the Advisor shall be deemed to include persons employed or retained
by the Advisor to furnish statistical information, research, and other factual
information, advice regarding economic factors and trends, information with
respect to technical and scientific developments, and such other information,
advice and assistance as the Advisor or the Trust’s Board of Trustees may desire
and reasonably request and any compliance staff and personnel required by
the
Advisor.
6.
EXPENSES.
(a)
With
respect to the operation of the Fund, the Advisor shall be responsible for
(i)
the Fund’s organizational expenses, (ii) providing the personnel, office space
and equipment reasonably necessary for the operation of the Fund, (iii) the
expenses of printing and distributing extra copies of the Fund’s prospectus,
statement of additional information, and sales and advertising materials
(but
not the legal, auditing or accounting fees attendant thereto) to prospective
investors (but not to existing shareholders) to the extent such expenses
are not
covered by any applicable plan adopted pursuant to Rule 12b-1 under the
Investment Company Act, (iv) the costs of any special Board of Trustees meetings
or shareholder meetings convened for the primary benefit of the Advisor,
and (v)
any costs of liquidating or reorganizing the Fund (unless such cost is otherwise
allocated by the Board of Trustees). If the Advisor has agreed to limit the
operating expenses of the Fund, the Advisor shall also be responsible on
a
monthly basis for any operating expenses that exceed the agreed upon expense
limit.
(b)
The
Fund is responsible for and have assumed the obligation for payment of all
of
their expenses, other than as stated in Subparagraph 6(a) above, including
but
not limited to: fees and expenses incurred in connection with the issuance,
registration and transfer of its shares; brokerage and commission expenses;
all
expenses of transfer, receipt, safekeeping, servicing and accounting for
the
cash, securities and other property of the Trust for the benefit of the Fund
including all fees and expenses of its custodian, shareholder services agent
and
accounting services agent; interest charges on any borrowings; costs and
expenses of pricing and calculating its daily net asset value and of maintaining
its books of account required under the Investment Company Act; taxes, if
any; a
pro rata portion of expenditures in connection with meetings of the Fund’
shareholders and the Trust’s Board of Trustees that are properly payable by the
Fund; salaries and expenses of officers of the Trust, including without
limitation the Trust’s Chief Compliance Officer, and fees and expenses of
members of the Trust’s Board of Trustees or members of any advisory board or
committee who are not members of, affiliated with or interested persons of
the
Advisor; insurance premiums on property or personnel of each Fund which inure
to
its benefit, including liability and fidelity bond insurance; the cost of
preparing and printing reports, proxy statements, prospectuses and statements
of
additional information of the Fund or other communications for distribution
to
existing shareholders; legal, auditing and accounting fees; all or any portion
of trade association dues or educational program expenses determined appropriate
by the Board of Trustees; fees and expenses (including legal fees) of
registering and maintaining registration of its shares for sale under federal
and applicable state and foreign securities laws; all expenses of maintaining
and servicing shareholder accounts, including all charges for transfer,
shareholder recordkeeping, dividend disbursing, redemption, and other agents
for
the benefit of the Fund, if any; and all other charges and costs of its
operation plus any extraordinary and non-recurring expenses, except as herein
otherwise prescribed.
(c)
The
Advisor may voluntarily absorb certain Fund expenses or waive the Advisor’s own
advisory fee.
(d)
To
the extent the Advisor incurs any costs by assuming expenses which are an
obligation of the Fund as set forth herein, the Fund shall promptly reimburse
the Advisor for such costs and expenses, except to the extent the Advisor
has
otherwise agreed to bear such expenses. To the extent the services for which
a
Fund is obligated to pay are performed by the Advisor, the Advisor shall
be
entitled to recover from such Fund to the extent of the Advisor’s actual costs
for providing such services. In determining the Advisor’s actual costs, the
Advisor may take into account an allocated portion of the salaries and overhead
of personnel performing such services.
(e)
The
Advisor may not pay fees in addition to any Fund distribution or servicing
fees
to financial intermediaries, including without limitation banks, broker-dealers,
financial advisors, or pension administrators, for sub-administration,
sub-transfer agency or any other shareholder servicing or distribution services
associated with shareholders whose shares are held in omnibus or other group
accounts, except with the prior authorization of the Trust’s Board of Trustees.
Where such arrangements are authorized by the Trust’s Board of Trustees, the
Advisor shall report regularly to the Trust on the amounts paid and the relevant
financial institutions.
7.
INVESTMENT ADVISORY AND MANAGEMENT FEE.
(a)
Each
Fund shall pay to the Advisor, and the Advisor agrees to accept, as full
compensation for all investment management and advisory services furnished
or
provided to such Fund pursuant to this Agreement, an annual management fee
at
the rate set forth in Schedule A to this Agreement.
(b)
The
management fee shall be accrued daily by each Fund and paid to the Advisor
on
the first business day of the succeeding month.
(c)
The
initial fee under this Agreement shall be payable on the first business day
of
the first month following the effective date of this Agreement and shall
be
prorated as set forth below. If this Agreement is terminated prior to the
end of
any month, the fee to the Advisor shall be prorated for the portion of any
month
in which this Agreement is in effect which is not a complete month according
to
the proportion which the number of calendar days in the month during which
the
Agreement is in effect bears to the number of calendar days in the month,
and
shall be payable within ten (10) days after the date of termination.
(d)
The
fee payable to the Advisor under this Agreement will be reduced to the extent
of
any receivable owed by the Advisor to a Fund and as required under any expense
limitation applicable to the Fund.
(e)
The
Advisor voluntarily may reduce any portion of the compensation or reimbursement
of expenses due to it pursuant to this Agreement and may agree to make payments
to limit the expenses which are the responsibility of a Fund under this
Agreement. Any such reduction or payment shall be applicable only to such
specific reduction or payment and shall not constitute an agreement to reduce
any future compensation or reimbursement due to the Advisor hereunder or
to
continue future payments. Any such reduction will be agreed to prior to accrual
of the related expense or fee and will be estimated daily and reconciled
and
paid on a monthly basis.
(f)
Any
such reductions made by the Advisor in its fees or payment of expenses which
are
a Fund’s obligation are subject to reimbursement by the Fund to the Advisor, if
so requested by the Advisor, in subsequent fiscal years if the aggregate
amount
actually paid by the Fund toward the operating expenses for such fiscal year
(taking into account the reimbursement) does not exceed the applicable
limitation on Fund expenses. Under the expense limitation agreement, the
Advisor
may recoup reimbursements made in any fiscal year of a Fund over the following
three fiscal years. Any such reimbursement is also contingent upon Board
of
Trustees review and approval at the time the reimbursement is made. Such
reimbursement may not be paid prior to a Fund’s payment of current ordinary
operating expenses.
(g)
The
Advisor may agree not to require payment of any portion of the compensation
or
reimbursement of expenses otherwise due to it pursuant to this Agreement.
Any
such agreement shall be applicable only with respect to the specific items
covered thereby and shall not constitute an agreement not to require payment
of
any future compensation or reimbursement due to the Advisor hereunder.
8.
NO SHORTING; NO BORROWING.
The
Advisor agrees that neither it nor any of its officers or employees shall
take
any short position in the shares of the Fund. This prohibition shall not
prevent
the purchase of such shares by any of the officers or employees of the Advisor
or any trust, pension, profit-sharing or other benefit plan for such persons
or
affiliates thereof, at a price not less than the net asset value thereof
at the
time of purchase, as allowed pursuant to rules promulgated under the Investment
Company Act. The Advisor agrees that neither it nor any of its officers or
employees shall borrow from the Fund or pledge or use the Fund’s assets in
connection with any borrowing not directly for the Fund’s benefit. For this
purpose, failure to pay any amount due and payable to the Fund for a period
of
more than thirty (30) days’ shall constitute a borrowing.
9.
CONFLICTS WITH TRUST’S GOVERNING DOCUMENTS AND APPLICABLE
LAWS.
Nothing
herein contained shall be deemed to require the Trust or the Fund to take
any
action contrary to the Trust’s Agreement and Declaration of Trust, By-Laws, or
any applicable statute or regulation, or to relieve or deprive the Board
of
Trustees of the Trust of its responsibility for and control of the conduct
of
the affairs of the Trust and Fund. In this connection, the Advisor acknowledges
that the Trustees retain ultimate plenary authority over the Fund and may
take
any and all actions necessary and reasonable to protect the interests of
shareholders.
10.
REPORTS AND ACCESS.
The
Advisor agrees to supply such information to the Fund’s administrator and to
permit such compliance inspections by the Fund’s administrator as shall be
reasonably necessary to permit the administrator to satisfy its obligations
and
respond to the reasonable requests of the Trustees.
11.
ADVISOR’S LIABILITIES AND INDEMNIFICATION.
(a)
The
Advisor shall have responsibility for the accuracy and completeness (and
liability for the lack thereof) of the statements in the Fund’s offering
materials (including the prospectus, the statement of additional information,
advertising and sales materials), except for information supplied by the
administrator or the Trust or another third party for inclusion therein.
(b)
The
Advisor shall be liable to the Fund for any loss (including brokerage charges)
incurred by the Fund as a result of any improper investment made by the Advisor.
(c)
In
the absence of willful misfeasance, bad faith, negligence, or reckless disregard
of the obligations or duties hereunder on the part of the Advisor, the Advisor
shall not be subject to liability to the Trust or the Fund or to any shareholder
of the Fund for any act or omission in the course of, or connected with,
rendering services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security by the Fund. Notwithstanding the
foregoing, federal securities laws and certain state laws impose liabilities
under certain circumstances on persons who have acted in good faith, and
therefore nothing herein shall in any way constitute a waiver or limitation
of
any rights which the Trust, the Fund or any shareholder of the Fund may have
under any federal securities law or state law.
(d)
Each
party to this Agreement shall indemnify and hold harmless the other party
and
the shareholders, directors, officers and employees of the other party (any
such
person, an “Indemnified Party”) against any loss, liability, claim, damage or
expense (including the reasonable cost of investigating and defending any
alleged loss, liability, claim, damage or expenses and reasonable counsel
fees
incurred in connection therewith) arising out of the Indemnified Party’s
performance or non-performance of any duties under this Agreement provided,
however, that nothing herein shall be deemed to protect any Indemnified Party
against any liability to which such Indemnified Party would otherwise be
subject
by reason of willful misfeasance, bad faith or negligence in the performance
of
duties hereunder or by reason of reckless disregard of obligations and duties
under this Agreement.
(e)
No
provision of this Agreement shall be construed to protect any Trustee or
officer
of the Trust, or officer of the Advisor, from liability in violation of Sections
17(h) and (i) of the Investment Company Act.
12.
NON-EXCLUSIVITY; TRADING FOR ADVISOR’S OWN ACCOUNT.
The
Trust’s employment of the Advisor is not an exclusive arrangement. The Trust may
from time to time employ other individuals or entities to furnish it with
the
services provided for herein. Likewise, the Advisor may act as investment
adviser for any other person, and shall not in any way be limited or restricted
from buying, selling or trading any securities for its or their own accounts
or
the accounts of others for whom it or they may be acting, provided, however,
that the Advisor expressly represents that it will undertake no activities
which
will adversely affect the performance of its obligations to the Fund under
this
Agreement; and provided further that the Advisor will adhere to a code of
ethics
governing employee trading and trading for proprietary accounts that conforms
to
the requirements of the Investment Company Act and the Advisers Act and has
been
approved by the Trust’s Board of Trustees.
13.
TERM.
(a)
This
Agreement shall become effective with respect to a Fund at the time such
Fund
commences operations pursuant to an effective amendment to the Trust’s
Registration Statement under the Securities Act of 1933 and shall remain
in
effect for a period of two (2) years, unless sooner terminated as hereinafter
provided. This Agreement shall continue in effect thereafter for additional
periods not exceeding one (l) year so long as such continuation is approved
for
a Fund at least annually by (i) the Board of Trustees of the Trust or by
the
vote of a majority of the outstanding voting securities of such Fund and
(ii)
the vote of a majority of the Trustees of the Trust who are not parties to
this
Agreement nor interested persons thereof, cast in person at a meeting called
for
the purpose of voting on such approval. The terms “majority of the outstanding
voting securities” and “interested persons” shall have the meanings as set forth
in the Investment Company Act.
(b)
The
Fund may use the names “Trust for Professional Managers” and “Ascentia
Long/Short” or any name derived from or using the name “Ascentia” only for so
long as this Agreement or any extension, renewal or amendment hereof remains
in
effect. Within sixty (60) days from such time as this Agreement shall no
longer
be in effect, the Fund shall cease to use such a name or any other name
connected with the Advisor.
14.
TERMINATION; NO ASSIGNMENT.
(a)
This
Agreement may be terminated by the Trust on behalf of a Fund at any time
without
payment of any penalty, by the Board of Trustees of the Trust or by vote
of a
majority of the outstanding voting securities of a Fund, upon sixty (60)
days’
written notice to the Advisor, and by the Advisor upon sixty (60) days written
notice to such Fund. In the event of a termination, the Advisor shall cooperate
in the orderly transfer of a Fund’s affairs and, at the request of the Board of
Trustees, transfer any and all books and records of such Fund maintained
by the
Advisor on behalf of the Fund.
(b)
This
Agreement shall terminate automatically in the event of any transfer or
assignment thereof, as defined in the Investment Company Act.
15.
NONPUBLIC
PERSONAL INFORMATION.
Notwithstanding
any provision herein to the contrary, the Advisor hereto agrees on behalf
of
itself and its directors, trustees, shareholders, officers, and employees
(1) to
treat confidentially and as proprietary information of the Trust (a) all
records
and other information relative to the Fund’s prior, present, or potential
shareholders (and clients of said shareholders) and (b) any Nonpublic Personal
Information, as defined under Section 248.3(t) of Regulation S-P (“Regulation
S-P”), promulgated under the Xxxxx-Xxxxx-Xxxxxx Act (the “G-L-B Act”), and (2)
except after prior notification to and approval in writing by the Trust,
not to
use such records and information for any purpose other than the performance
of
its responsibilities and duties hereunder, or as otherwise permitted by
Regulation S-P or the G-L-B Act, and if in compliance therewith, the privacy
policies adopted by the Trust and communicated in writing to the Advisor.
Such
written approval shall not be unreasonably withheld by the Trust and may
not be
withheld where the Advisor may be exposed to civil or criminal contempt or
other
proceedings for failure to comply after being requested to divulge such
information by duly constituted authorities.
16.
ANTI-MONEY LAUNDERING COMPLIANCE. The
Advisor acknowledges that, in compliance with the Bank Secrecy Act, as amended,
the USA PATRIOT Act, and any implementing regulations thereunder (together,
“AML
Laws”), the Trust has adopted an Anti-Money Laundering Policy. The Advisor
agrees to comply with the Trust’s Anti-Money Laundering Policy and the AML Laws,
as the same may apply to the Advisor, now and in the future. The Advisor
further
agrees to provide to the Trust and/or the Administrator such reports,
certifications and contractual assurances as may be reasonably requested
by the
Trust. The Trust may disclose information regarding the Advisor to governmental
and/or regulatory or self-regulatory authorities to the extent required by
applicable law or regulation and may file reports with such authorities as
may
be required by applicable law or regulation.
17.
CERTIFICATIONS; DISCLOSURE CONTROLS AND PROCEDURES. The
Advisor acknowledges that, in compliance with the Xxxxxxxx-Xxxxx Act, and
the
implementing regulations promulgated thereunder, the Trust and the Fund are
required to make certain certifications and have adopted disclosure controls
and
procedures. To the extent reasonably requested by the Trust, the Advisor
agrees
to use its best efforts to assist the Trust and the Fund in complying with
the
Xxxxxxxx-Xxxxx Act and implementing the Trust’s disclosure controls and
procedures. The Advisor agrees to inform the Trust of any material development
related to the Fund that the Advisor reasonably believes is relevant to the
Fund’s certification obligations under the Xxxxxxxx-Xxxxx Act.
18.
SEVERABILITY.
If any
provision of this Agreement shall be held or made invalid by a court decision,
statute or rule, or shall be otherwise rendered invalid, the remainder of
this
Agreement shall not be affected thereby.
19.
CAPTIONS.
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.
20.
GOVERNING LAW.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of Wisconsin without giving effect to the conflict of laws principles
thereof; provided that nothing herein shall be construed to preempt, or to
be
inconsistent with, any federal law, regulation or rule, including the Investment
Company Act and the Advisers Act and any rules and regulations promulgated
thereunder.
IN
WITNESS WHEREOF,
the
parties hereto have caused this Agreement to be duly executed by their duly
authorized officers, all on the day and year first above written.
TRUST
FOR PROFESSSIONAL MANAGERS ASCENTIA
CAPITAL PARTNERS, LLC
on
behalf
of the
Ascentia
Long/Short Fund
By:
/s/
Xxxxxx X.
Xxxxxxxxx
By:
/s/
Xxxxxxx XxXxxxx
Name:
Xxxxxx
X.
Xxxxxxxxx
Name: Xxxxxxx
XxXxxxx
Title:
President
and
Chairperson
Title: President
SCHEDULE
A
Series
or
Fund of Trust for Professional Managers Annual
Fee rate
---------------------------------------------------
--------------- -------------------
Ascentia
Long/Short Fund 1.98%
of
average net assets
