INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this _____ day of _____, 2002, by and between ACP Continuum
Return Fund II, LLC, a Delaware Limited Liability Company (the "Company"), and
Ascendant Capital Partners, LLC, a Delaware Limited Liability Company (the
"Investment Manager").
WHEREAS, the Company is registered as a non-diversified, closed-end
management investment company under the Investment Company Act of 1940, as
amended (the "Investment Company Act").
WHEREAS, the Company has retained PFPC, Inc. (the "Administrator") to
provide administration of the Company's operations, subject to the control of
the Board of Directors;
WHEREAS, the Company desires to retain the Investment Manager to render
investment management services to the Company, and the Investment Manager is
willing to render such services:
NOW, THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows:
1. DUTIES OF INVESTMENT MANAGER. The Company employs the Investment
Manager to manage the investment and reinvestment of the assets of the
Company, and to continuously review, supervise and (where appropriate)
administer the investment program of the Company, to determine in its
discretion (where appropriate) the investments to be purchased or
sold, to provide the Administrator and the Company with records
concerning the Investment Manager's activities which the Company is
required to maintain, and to render regular reports to the
Administrator and to the Company's officers and Directors concerning
the Investment Manager's discharge of the foregoing responsibilities.
The retention of a sub-adviser by the Investment Manager shall not
relieve the Investment Manager of its responsibilities under this
Agreement.
The Investment Manager shall discharge the foregoing responsibilities
subject to the control of the Board of Directors of the Company and in
compliance with such policies as the Directors may from time to time
establish, and in compliance with the objectives, policies, and
limitations of the Company as set forth in its Prospectus, Statement
of Additional Information and Operating Agreement, as amended from
time to time, and applicable laws and regulations.
The Investment Manager accepts such employment and agrees, at its own
expense, to render the services and to provide the office space,
furnishings and equipment and the personnel (including any
sub-advisers) required by it to perform the services on the terms and
for the compensation provided herein. The Investment Manager will not,
however, pay for the cost of securities, commodities, and other
investments (including brokerage commissions and other transaction
charges, if any) purchased or sold for the Company.
2. COMPANY TRANSACTIONS. The Investment Manager is authorized to select
the brokers or dealers that will execute the purchases and sales of
the Company's investments and is directed to use its best efforts to
obtain the best net results as described from time to time in the
Company's Prospectus and Statement of Additional Information. The
Investment Manager will promptly communicate to the Administrator and
to the officers and the Directors of the Company such information
relating to the Company's investment transactions as they may
reasonably request.
It is understood that the Investment Manager will not be deemed to
have acted unlawfully, or to have breached a fiduciary duty to the
Company or be in breach of any obligation owing to the Company under
this Agreement, or otherwise, by reason of its having directed a
securities transaction on behalf of the Company to a broker-dealer in
compliance with the provisions of Section 28(e) of the Securities
Exchange Act of 1934 or as described from time to time by the
Company's Prospectus and Statement of Additional Information.
3. COMPENSATION OF THE INVESTMENT MANAGER. For the services to be
rendered by the Investment Manager as provided in Sections 1 and 2 of
this Agreement, the Investment Manager is entitled to receive from
persons who purchase Units of the Company ("Members") an annual
management fee (the "Management Fee"). The Management Fee is equal to
1.25% of the net asset value of each Member's Units and will be
subject to an adjustment (the "Management Fee Adjustment") based on
the annual returns of each Member's Units. The Investment Manager's
fee is calculated and accrued monthly and is paid out to the
Investment Manager on a quarterly basis. The Management Fee Adjustment
will be determined in accordance with the scale as specified in the
Schedule(s) which is attached hereto and made part of this Agreement.
For purposes of determining the Management Fee, net assets will be
determined by taking into account net realized gain or loss and the
net change in unrealized appreciation or depreciation of net assets.
All rights of compensation under this Agreement for services performed
as of the termination date shall survive the termination of this
Agreement.
4. OTHER EXPENSES. The Investment Manager shall pay all expenses of
printing and mailing reports, prospectuses, statements of additional
information, and sales literature relating to the solicitation of
prospective clients. The Company shall pay all expenses relating to
mailing to existing Members prospectuses, statements of additional
information, proxy solicitation material and Member reports.
5. EXCESS EXPENSES. If the expenses for the Company for any fiscal year
(including fees and other amounts payable to the Investment Manager,
but excluding interest, taxes, brokerage costs, litigation, and other
extraordinary costs) as calculated every business day would exceed the
expense limitations imposed on investment companies by any applicable
statute or regulatory authority of any
jurisdiction in which Units of the Company are qualified for offer and
sale, the Investment Manager shall bear such excess cost.
Payment of expenses by the Investment Manager pursuant to this Section
5 shall be settled on a monthly basis (subject to fiscal year end
reconciliation) by a reduction in the fee payable to the Investment
Manager for such month pursuant to Section 3 and, if such reduction
shall be insufficient to offset such expenses, by reimbursing the
Company.
6. REPORTS. The Company and the Investment Manager agree to furnish to
each other, if applicable, current prospectuses, proxy statements,
reports to Members, certified copies of their financial statements,
and such other information with regard to their affairs as each may
reasonably request.
7. STATUS OF INVESTMENT MANAGER. The services of the Investment Manager
to the Company are not to be deemed exclusive, and the Investment
Manager shall be free to render similar services to others so long as
its services to the Company are not impaired thereby. The Investment
Manager shall be deemed to be an independent contractor and shall,
unless otherwise expressly provided or authorized, have no authority
to act for or represent the Company in any way or otherwise be deemed
an agent of the Company.
8. CERTAIN RECORDS. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated
under the Investment Company Act which are prepared or maintained by
the Investment Manager on behalf of the Company are the property of
the Company and will be surrendered promptly to the Company on
request.
9. LIMITATION OF LIABILITY OF INVESTMENT MANAGER. The duties of the
Investment Manager shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted
against the Investment Manager hereunder. The Investment Manager shall
not be liable for any error of judgment or mistake of law or for any
loss arising out of any investment or for any act or omission in
carrying out its duties hereunder, except a loss resulting from
willful misfeasance, bad faith or gross negligence in the performance
of its duties, or by reason of reckless disregard of its obligations
and duties hereunder, except as may otherwise be provided under
provisions of applicable state law or Federal securities law which
cannot be waived or modified hereby. (As used in this Paragraph 9, the
term "Investment Manager" shall include directors, officers, employees
and other corporate agents of the Investment Manager as well as the
Limited Liability Company itself).
10. PERMISSIBLE INTERESTS. Directors, agents, and Members of the Company
are or may be interested in the Investment Manager (or any successor
thereof) as directors, partners, officers, or Members, or otherwise;
directors, partners, officers, agents, and Members of the Investment
Manager are or may be interested
in the Company as Directors, Members or otherwise; and the Investment
Manager (or any successor) is or may be interested in the Company as a
Member or otherwise. In addition, brokerage transactions for the
Company may be effected through affiliates of the Investment Manager
if approved by the Board of Directors, subject to the rules and
regulations of the Securities and Exchange Commission.
11. LICENSE OF INVESTMENT MANAGER'S NAME. The Investment Manager hereby
agrees to grant a license to the Company for use of its name in the
names of the Company for the term of this Agreement and such license
shall terminate upon termination of this Agreement.
12. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall remain in effect until two years from date of
execution, and thereafter, for periods of one year so long as such
continuance thereafter is specifically approved at least annually (a)
by the vote of a majority of those Directors of the Company who are
not parties to this Agreement or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on such
approval, and (b) by the Directors of the Company or by vote of a
majority of the outstanding voting Units of the Company; provided,
however, that if the Members of the Company fail to approve the
Agreement as provided herein, the Investment Manager may continue to
serve hereunder in the manner and to the extent permitted by the
Investment Company Act and rules and regulations thereunder. The
foregoing requirement that continuance of this Agreement be
"specifically approved at least annually" shall be construed in a
manner consistent with the Investment Company Act and the rules and
regulations thereunder.
This Agreement may be terminated at any time, without the payment of
any penalty by vote of a majority of the Directors of the Company or
by vote of a majority of the outstanding voting Units of the Company
on not less than 30 days nor more than 60 days written notice to the
Investment Manager, or by the Investment Manager at any time without
the payment of any penalty, on 90 days written notice to the Company.
This Agreement will automatically and immediately terminate in the
event of its assignment. Any notice under this Agreement shall be
given in writing, addressed and delivered, or mailed postpaid, to the
other party at any office of such party.
As used in this Section 12, the terms "assignment", "interested
persons", and a "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the
Investment Company Act and the rules and regulations thereunder;
subject to such exemptions as may be granted by the Securities and
Exchange Commission under said Act.
13. NOTICE. Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice
to the other party at the last address furnished by the other party to
the party giving notice: if to the Company, 0000 Xxxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxx, XX 00000, Attention: President, and if to the
Investment Manager at 0000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxx, XX
00000, Attention: President.
14. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
15. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the Commonwealth of Pennsylvania and the applicable
provisions of the Investment Company Act. To the extent that the
applicable laws of the Commonwealth of Pennsylvania, or any of the
provisions herein, conflict with the applicable provisions of the
Investment Company Act, the latter shall control.
A copy of the Certificate of Formation of the Company is on file with the
Secretary of the State of Delaware, and notice is hereby given that this
instrument is executed on behalf of the Directors of the Company as Directors,
and are not binding upon any of the Directors, officers, or Members of the
Company individually but binding only upon the assets and property of the
Company.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first written above.
ACP CONTINUUM RETURN FUND II, LLC
By:
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Attest:
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ASCENDANT CAPITAL PARTNERS, LLC
By:
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Attest:
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SCHEDULE A DATED ________, 2002
TO THE
INVESTMENT MANAGEMENT AGREEMENT
DATED _______, 2002
BETWEEN
ACP CONTINUUM RETURN FUND II, LLC
AND
ASCENDANT CAPITAL PARTNERS, LLC
The Management Fee Adjustment is determined in accordance with the following
scale:
Annual Return Management Fee Adjustment Net Management Fee
Less than 6.00% -0.50% 0.75%
6.00% to 12.00% -- 1.25%
Greater than 12.00% 0.50% 1.75%
