EXHIBIT (2)(G)(I)
INVESTMENT MANAGEMENT AGREEMENT
XXXXXXXXXX PARTNERS, LLC
INVESTMENT MANAGEMENT AGREEMENT, made as of July 1, 2005, by and
between XXXXXXXXXX PARTNERS, LLC, a Delaware limited liability company (the
"Fund") and XXXXXXXXXX INVESTORS, LLC, a Delaware limited liability company (the
"Investment Manager").
W I T N E S S E T H:
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WHEREAS, the Fund intends to engage in business as a closed-end,
non-diversified management investment company and is registered as such with the
Securities and Exchange Commission (the "SEC") under the Investment Company Act
of 1940, as amended (the "1940 Act"); and
WHEREAS, the Investment Manager is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and
engages in the business of acting as an investment adviser; and
WHEREAS, the Fund desires to retain the Investment Manager to render
investment advisory services to the Fund in the manner and on the terms and
conditions hereinafter set forth; and
WHEREAS, the Investment Manager desires to accept such responsibility
in the matter and on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, it is agreed by and between the parties, as follows:
1. DEFINITIONS. All capitalized terms used herein and not otherwise
defined herein shall have the meaning set forth in the Fund's Private Placement
Memorandum, as the same may be amended from time to time (the "Private Placement
Memorandum").
2. INVESTMENT MANAGEMENT SERVICES.
(a) The Fund hereby retains the Investment Manager to act as its
Investment Manager and, subject to the supervision and control of the Board of
Managers of the Fund (the "Board of Managers"), to manage the investment
activities of the Fund as hereinafter set forth. Without limiting the
generality of the foregoing, the Investment Manager shall: obtain and evaluate
such information and advice relating to the economy, securities markets, and
securities as it deems necessary or useful to discharge its duties hereunder;
continuously manage the assets of the Fund in a manner consistent with (i) the
investment objective, policies and restrictions of the Fund, as set forth in
the Private Placement Memorandum and as may be adopted from time to time by
the Board of Managers, (ii) the provisions of the limited liability company
agreement of the Fund, as amended from time to time (the "LLC Agreement"), and
(iii) applicable laws and regulations; determine the securities and other
investments to be purchased, sold or otherwise disposed of by the Fund and the
timing of such purchases, sales and dispositions; invest the Fund's assets in
a diverse group of selected investment funds ("Investment Funds"), which are
managed by third-party investment advisers ("Portfolio Managers"), including
Portfolio Managers of Separately Managed Accounts; and take such further
action, including the placing of purchase and sale orders and the voting of
securities on behalf of the Fund, as the Investment Manager shall deem
necessary or appropriate. The Investment Manager shall furnish to or place at
the disposal of the Fund such of the information, evaluations, analyses and
opinions formulated or obtained by the Investment Manager in the discharge of
its duties as the Fund may, from time to time, reasonably request.
(b) Without limiting the generality of Section 2(a) hereof, the
Investment Manager shall be authorized to open, maintain and close accounts in
the name and on behalf of the Fund with brokers and dealers as it deems
appropriate; to identify appropriate Investment Funds and Portfolio Managers and
determine the assets to be committed to each of them; and to enter into, make
and perform all contracts, agreements and other undertakings (including, without
limitation, subscription agreements and partnership or limited liability company
agreements) that, in the opinion of the Investment Manager, may be necessary,
advisable or incidental to the carrying out of the investment management duties
hereunder.
(c) The Fund will, from time to time, furnish or otherwise make
available to the Investment Manager such financial reports, proxy statements,
policies and procedures and other information relating to the business and
affairs of the Fund as the Investment Manager may reasonably require in order to
discharge its duties and obligations hereunder.
3. COMPENSATION AND EXPENSES
(a) In consideration of the services provided by the Investment Manager
under this Agreement, the Fund agrees to pay the Investment Manager a monthly
fee of 0.125% (1.50%) on an annualized basis) of the month-end capital account
balance of each Member, before giving effect to repurchases or the Incentive
Allocation, and after giving effect to other expenses, as set out in the Private
Placement Memorandum (the "Investment Management Fee"). The Investment
Management Fee is an expense of the Fund and will be paid monthly in arrears
within twenty (20) days after the end of each month.
(b) The Investment Manager will bear all of its own costs incurred in
providing investment advisory services to the Fund, including travel and other
expenses related to its selection and monitoring of Portfolio Managers.
(c) All costs and expenses of the Fund not expressly assumed by the
Investment Manager under this Agreement shall be paid by the Fund, including,
but not limited to: (i) fees and expenses incident to the organization and
registration of the Fund; (ii) offering costs; (iii) costs of compliance with
federal and state securities laws; (iv) all costs and expenses associated with
the organization and operation of any Separately Managed Accounts; (v) all
expenses incident to holding meetings of the Board of Managers and Members,
including reasonable travel and out-of-pocket expenses of the members of the
Board of Managers; (vi) the fees and disbursements of Fund counsel and any
counsel retained to represent the Managers who are not Independent Managers (as
such term is defined in Section 6(a)), independent accountants for the Fund and
other consultants and professionals engaged on behalf of the Fund; (vii) fees
payable to the administrator, custodians and other persons providing services to
the Fund; (viii) insurance premiums for fidelity and other insurance coverage
relating to the Fund's operations; and (ix) such extraordinary non-recurring
expenses as may arise, including litigation, affecting the Fund and any legal
obligation as to which the Fund may be required to indemnify any Manager or
other person. Any officers or employees of the Investment Manager (or any entity
controlling, controlled by, or under common control with the Investment Manager)
who may also serve as officers, Managers or employees of the Fund shall not
receive any compensation from the Fund for their services.
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4. ACTIVITIES OF THE INVESTMENT MANAGER
Nothing in this Agreement shall prevent the Investment Manager
or any Affiliate (as such term is defined in Section 5(a)) thereof from acting
as the investment manager for any other person, firm, fund, corporation or other
entity and shall not in any way limit or restrict the Investment Manager, or any
Affiliate, or their respective directors, officers, stockholders or employees
from buying, selling or trading any securities or other investments for its or
their own account or for the account of others for whom it or they may be
acting, provided that such activities do not adversely affect or otherwise
impair the performance by the Investment Manager of its duties and obligations
under this Agreement, the 1940 Act (including rule 17j-1 under the 0000 Xxx) or
under the Advisers Act.
5. SCOPE OF LIABILITIES AND INDEMNIFICATION
(a) The Investment Manager will use its best efforts in the supervision
and management of the investment activities of the Fund and in providing
services hereunder, but in the absence of gross negligence, willful misfeasance
or bad faith, the Investment Manager, its members, their respective directors,
officers or employees and their respective affiliates, executors, heirs,
assigns, successors or other legal representatives (collectively, the
"Affiliates") shall not be liable to the Fund for any error of judgment, for any
mistake of law or for any act or omission by the Investment Manager or any of
the Affiliates.
(b) The Fund shall indemnify the Investment Manager and any Affiliate
(each an "Indemnified Person") against any and all costs, losses, claims,
damages or liabilities, joint or several, including, without limitation,
reasonable attorneys' fees and disbursements, resulting in any way from the
performance or non-performance of any Indemnified Person's duties with respect
to the Fund, except those resulting from the gross negligence, willful
misfeasance or bad faith of an Indemnified Person, and in the case of criminal
proceedings, unless such Indemnified Person had reasonable cause to believe its
actions unlawful (collectively, "disabling conduct"). Indemnification shall be
made upon the following: (i) a final decision on the merits by a court or other
body before which the proceeding was brought that the Indemnified Person was not
liable by reason of disabling conduct or (ii) a reasonable determination, based
upon a review of the facts and reached by (A) the vote of a majority of the
Managers who are not parties to the proceeding or (B) legal counsel selected by
a vote of a majority of the Board of Managers in a written advice, that the
Indemnified Person is entitled to indemnification hereunder. The Fund shall
advance to an Indemnified Person (to the extent that it has available assets and
need not borrow to do so) reasonable attorneys' fees and other costs and
expenses incurred in connection with the defense of any action or proceeding
arising out of such performance or non-performance; PROVIDED, HOWEVER, that the
determination to make any such advance shall be preceded by a reasonable
determination reached by either (A) a vote of a majority of the Managers who are
not parties to the proceeding or (B) legal counsel selected by a vote of a
majority of the Board of Managers in a written advice, that the indemnified
person ultimately will be found entitled to indemnification. The Investment
Manager agrees, and each other Indemnified Person will agree as a condition to
any such advance, that in the event the Indemnified Person receives any such
advance, the Indemnified Person shall reimburse the Fund for such fees, costs
and expenses to the extent that it shall be determined that the Indemnified
Person was not entitled to indemnification under this Section 5.
(c) Notwithstanding any of the foregoing to the contrary, the
provisions of this Section 5 shall not be construed so as to relieve the
Indemnified Person of, or provide indemnification with respect to, any liability
(including liability under federal securities laws, which, under certain
circumstances, imposes liability even on persons who act in good faith) to the
extent (but only to the extent) that such liability may not be waived, limited
or modified under applicable law or that such indemnification would be in
violation of applicable law, but shall be construed so as to effectuate the
provisions of this Section 5 to the fullest extent permitted by law.
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6. TERMINATION, RENEWAL AND NOTICE.
(a) This Agreement shall remain in effect for an initial term of two
years from the date of its execution, and shall continue in effect from year to
year thereafter provided such continuance is approved at least annually by the
vote of a majority of the outstanding voting securities of the Fund, as defined
by the 1940 Act and the rules thereunder, or by the Board of Managers; and
provided that in either event such continuance is also approved by a majority of
the Managers who are not parties to this Agreement or "interested persons" (as
defined by the 0000 Xxx) of any such party (the "Independent Managers"), by vote
cast in person at a meeting called for the purpose of voting on such approval.
The Fund may at any time, without payment of any penalty, terminate this
Agreement upon sixty days' prior written notice to the Investment Manager,
either by majority vote of the Board of Managers or by the vote of a majority of
the outstanding voting securities of the Fund (as defined by the 1940 Act and
the rules thereunder). The Investment Manager may at any time, without payment
of penalty, terminate this Agreement upon sixty days' prior written notice to
the Fund.
(b) Any notice under this Agreement shall be given in writing and shall
be deemed to have been duly given when delivered by hand or facsimile or five
days after mailed by certified mail, post-paid, by return receipt requested to
the other party at the principal office of such party.
7. AMENDMENT AND ASSIGNMENT.
(a) This Agreement may be amended only by the written agreement of the
parties. Any amendment shall be required to be approved by the Board of
Managers, including by a majority of the Independent Managers in accordance with
the provisions of Section 15(c) of the 1940 Act and the rules thereunder. If
required by the 1940 Act, any amendment shall also be required to be approved by
such vote of members of the Fund as is required by the 1940 Act.
(b) This Agreement shall automatically terminate in the event of its
assignment (to the extent required by the 1940 Act and the rules thereunder)
unless such automatic termination shall be prevented by an exemptive order of
the Securities and Exchange Commission.
8. DISCLAIMER OF MEMBER OR MANAGER LIABILITY. The Investment Manager
understands and agrees that the obligations of the Fund under this Agreement are
not binding upon any Member or Manager of the Fund personally, but bind only the
Fund and the Fund's property; the Investment Manager represents that it has
notice of the provisions of the LLC Agreement disclaiming Member and Manager
liability for acts and obligations of the Fund.
9. USE OF NAME "XXXXXXXXXX." The Investment Manager hereby grants to
the Fund a royalty-free, non-exclusive license to use the name "Xxxxxxxxxx" in
the name of the Fund for the duration of this Agreement and any extensions or
renewals thereof. Such license may, upon termination of this Agreement, be
terminated by the Investment Manager, in which event the Fund shall promptly
take whatever action may be necessary to change its name and discontinue any
further use of the name "Xxxxxxxxxx" in the name of the Fund or otherwise. The
name "Xxxxxxxxxx" may be used or licensed by the Investment Manager and its
affiliates in connection with any of their activities, or licensed by the
Investment Manager to any other party.
10. QUESTIONS OF INTERPRETATION. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York and the
applicable provisions of the 1940 Act. To the extent the law of the State of New
York, or any of the provisions herein, conflict with the provisions of the 1940
Act, the latter shall control.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
XXXXXXXXXX PARTNERS, LLC
By: /S/ XXXXX XXXXXXXXXX
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Name: Xxxxx Xxxxxxxxxx
Title: Manager
XXXXXXXXXX INVESTORS, LLC
By: /S/ XXXXX XXXXXXXXXX
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Name: Xxxxx Xxxxxxxxxx
Title: President
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