SELECT TEN PLUS FUND, LLC
MANAGEMENT AGREEMENT
Agreement, made this ___ day of ______ 2000 between Select Ten Plus Fund, LLC
(the FUND) and Touchstone Advisors, Inc., an Ohio corporation (the ADVISER).
W I T N E S S ET H
WHEREAS, the Fund is 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 DIVISION), each of which is established
pursuant to a resolution of the Board of Directors of the Fund, and the Board of
Directors may from time to time terminate such Divisions or establish and
terminate additional Divisions; 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 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 Divisions; 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 Division 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 Directors 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 Directors, and in compliance with each Division's investment objectives and
policies, the Adviser will provide an investment program for each Division and
determine the composition of the assets of each Division, including
determination of the purchase, retention or sale of the securities, cash, and
other investments contained in such Division'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 Division. To the extent, if any,
permitted by the investment policies of a Division, the Adviser shall make
determinations as to and execute and perform futures contracts and options on
behalf of such Division. The Adviser will provide the services under this
Agreement in accordance with each Division's investment objective or objectives,
policies, procedures and restrictions as stated in the Fund's Registration
Statement, as amended from time to time (the REGISTRATIONSTATEMENT), filed with
the Securities and Exchange Commission (the SEC) and any other documents that
set forth investment policies, procedures or restrictions governing the
Division.
The Adviser further agrees as follows:
(a) The Adviser will manage each Division so as to ensure compliance by such
Division with the diversification requirements of Section 817(h) of the Internal
Revenue Code of 1986 and regulations issued thereunder. In managing the Division
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 Directors 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 Division 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 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 Division,
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 Division as may be reasonably
necessary to enable the Agent to perform their administrative and recordkeeping
responsibilities with respect to such Division. 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
Division. 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 Division'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 Division 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 Division'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 Directors for consideration at meetings of the Board on the
investment program for each Division and the issuers and securities represented
in each Division's securities holdings, including a schedule of the investments
and other assets held in such Division and a statement of all purchases and
sales for each Division since the last such statement, and will furnish the
Fund's Board of Directors with periodic and
special reports with respect to each Division as the Directors may reasonably
request, including statistical information with respect to the Division's
securities.
3. Broker-Dealer Selection. The Adviser is responsible for decisions to buy or
sell securities and other investments for each Division, 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 Directors 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 Division 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 Division 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 Division.
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 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
Divisions' Sub-Adviser, if any, Agent, accountants, attorneys, and other parties
performing services or operational functions for the Divisions.
(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
Divisions 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 Directors 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
unit holders 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 assist in the preparation of and, after approval by the
Fund, file and arrange for the distribution of proxy materials to Fund unit
holders as required by applicable law.
(f) 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.
(g) The Adviser shall take such other action with respect to the Divisions,
after approval by the Fund, as may be 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.
(h) The Adviser shall make its officers and employees available to the Board of
Directors and officers of the Fund and Sub-Adviser for consultation and
discussions regarding the supervision and administration of the Divisions.
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 Directors who are not
"interested persons" (within the meaning of the 0000 Xxx) of the Fund, the
Adviser, 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 Division 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 Divisions will be allocated among the Divisions by or under the direction
of the Fund's Board of Directors in such manner as the Board shall determine to
be fair and equitable. Expenses borne by each Division include, but are not
limited to, the following (or the Division's allocated share of the following):
(i) The cost (including brokerage commissions, if any) of securities purchased
or sold by the Division 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 Division under federal or state securities laws and
maintenance of such registrations and qualifications;
(v) Fees and expenses payable to the members of the Board of Directors who are
not "interested persons" of the Fund or the Adviser, 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 unit holders;
(xi) Any extraordinary expenses (including fees and disbursements of counsel)
incurred by the Fund or any Division;
(xii) Fees, voluntary assessments and other expenses incurred in connection with
membership in investment company organizations; and
(xiii) Costs of meetings of unit holders.
7. Compensation. For the services provided and the expenses assumed pursuant to
this Agreement, each Division 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
Division. This fee will be deducted from the assets of each respective Division
and paid to the Adviser monthly, but will be accrued daily for purposes of
determining the value of each Division 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, however, that this Agreement may be
terminated by the Fund or any Division thereof (with respect to such Division)
at any time, without the payment of
any penalty, by the Board of Directors of the Fund or by vote of a majority of
the outstanding voting securities (as defined in the 0000 Xxx) of a Division, 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 Directors, 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
Delaware.
14. Fund. The Fund was established under the Delaware Limited Liability Company
laws as of September 30, 1998. The Fund may establish separate Divisions, and
all debts, liabilities, obligations and expenses of a particular Division shall
be enforceable only against the assets of that Division and not against the
assets of any other Division or of the Fund as a whole.
15. 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.
16. 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
By:_____________________________
TOUCHSTONE ADVISORS, INC.
By:______________________________
