INVESTMENT MANAGEMENT AGREEMENT
THIS INVESTMENT MANAGEMENT AGREEMENT is made the 13th day of October,
2006, by and between Old Mutual 2100 Absolute Return Fund, L.L.C., a Delaware
limited liability company (the "Fund"), and 0000 Xxxxx Xxxx LLC, a Delaware
limited liability company (the "Investment Adviser").
WHEREAS, the Fund is registered with the Securities and Exchange
Commission (the "Commission") under the Investment Company Act of 1940, as
amended (the "1940 Act"), as a closed-end, non-diversified management investment
company, and the Investment Adviser is an investment adviser registered as such
with the Commission under the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Fund desires to retain the Investment Adviser to act as
its investment adviser pursuant to this Agreement; and
WHEREAS, the Investment Adviser desires to be retained to act as
investment adviser to the Fund pursuant to this Agreement;
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed, by and between the parties, as follows:
1. The Fund hereby retains the Investment Adviser to:
(a) act as its investment adviser and, subject to the supervision
and control of the Board of Managers of the Fund (the "Board"), manage the
investment activities of the Fund as hereinafter set forth. Without limiting the
generality of the foregoing, the Investment Adviser 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 the
investment objective, policies and restrictions of the Fund, as set forth in the
registration statement of the Fund filed with the Commission on Form N-2, as the
same may be amended from time to time, and such other policies as may be adopted
from time to time by the Board, and applicable laws and regulations; determine
the securities to be purchased, sold or otherwise disposed of by the Fund and
the timing of such purchases, sales and dispositions; invest discrete portions
of the Fund's assets (which may constitute, in the aggregate, all of the Fund's
assets) in unregistered investment funds or other investment vehicles and
registered investment companies ("Portfolio Funds"), which are managed by
investment managers ("Portfolio Managers"), which retention shall be subject to
compliance with applicable 1940 Act provisions, 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 Adviser shall deem necessary or
appropriate. The Investment Adviser 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 Adviser in the discharge of its duties as the Fund
may, from time to time, reasonably request; and
(b) provide, and the Investment Adviser hereby agrees to provide,
certain management services to the Fund. The management services to be provided
by the Investment Adviser shall include:
(i) providing office space, telephone and utilities;
(ii) providing administrative and secretarial, clerical and
other personnel as necessary to provide the services
required to be provided under this Agreement;
(iii) monitoring relations and communications between investors
and the Fund;
(iv) assisting in the drafting and updating of disclosure
documents relating to the Fund and assisting in the
preparation of offering materials;
(v) assisting in the preparation of regulatory filings with the
Commission and state securities regulators and other
Federal and state regulatory authorities;
(vi) assisting in the preparation of reports to and other
informational materials for members and assisting in the
preparation of proxy statements and other member
communications;
(vii) monitoring compliance with regulatory requirements and with
the Fund's investment objective, policies and restrictions
as established by the Board;
(viii) assisting in the preparation of materials and reports for
use in connection with meetings of the Board;
(ix) maintaining and preserving those books and records of the
Fund not maintained by any Sub-Adviser (as defined in
paragraph 2 below) of the Fund or the Fund's administrator,
accounting agent or custodian (which books and records
shall be the property of the Fund and maintained and
preserved as required by the 1940 Act and the rules
thereunder and shall be surrendered to the Fund promptly
upon request);
(x) providing the services of persons employed by the
Investment Adviser or its affiliates who may be appointed
as officers of the Fund by the Board; and
(xi) assisting the Fund in routine regulatory examinations, and
working closely with any counsel of the Fund and any
counsel retained to represent any members of the Board who
are not "interested persons," as defined by the 1940 Act
and the rules thereunder (the
"Independent Managers") of the Fund in response to any
litigation, investigations or regulatory matters.
2. Provided that the Fund shall not be required to pay any
compensation to the Investment Adviser for the services to be provided hereunder
other than as provided by the terms of this Agreement, the Investment Adviser is
authorized: (i) to obtain investment information, research or assistance from
any other person, firm or corporation to supplement, update or otherwise improve
its investment management services; and (ii) to enter into investment
sub-advisory agreements with any registered investment adviser (a
"Sub-Adviser"), subject to such approvals of the Board and members of the Fund
("Members") as may be required to comply with applicable provisions of the 1940
Act, and delegating any or all of the services required to be provided by the
Investment Adviser under paragraph 1(a) hereof, subject to the supervision of
the Investment Adviser.
3. Without limiting the generality of paragraph 1 hereof, the
Investment Adviser and, if applicable, the Sub-Adviser, shall be authorized to
open, maintain and close accounts in the name and on behalf of the Fund with
brokers and dealers as it determines are appropriate; to select and place orders
with brokers, dealers or other financial intermediaries for the execution,
clearance or settlement of any transactions on behalf of the Fund on such terms
as the Investment Adviser (or the Sub-Adviser) considers appropriate and that
are consistent with the policies of the Fund; and, subject to any policies
adopted by the Board and to the provisions of applicable law, to agree to such
commissions, fees and other charges on behalf of the Fund as it shall deem
reasonable in the circumstances taking into account all such factors as it deems
relevant (including the quality of research and other services made available to
it even if such services are not for the exclusive benefit of the Fund and the
cost of such services does not represent the lowest cost available) and shall be
under no obligation to combine or arrange orders so as to obtain reduced charges
unless otherwise required under the federal securities laws. The Investment
Adviser (or the Sub-Adviser) may, subject to such procedures as may be adopted
by the Board, use affiliates of the Investment Adviser as brokers to effect the
Fund's securities transactions and the Fund may pay such commissions to such
brokers in such amounts as are permissible under applicable law.
4. INVESTMENT MANAGEMENT FEE; EXPENSES
(a) In consideration for the provision of the services provided by
the Investment Adviser hereunder and the Investment Adviser's bearing of certain
expenses, the Fund shall pay the Investment Adviser a monthly fee equal to
0.104% (1.25% on an annual basis) of the Fund's net assets as of the end of the
month (the "Investment Management Fee").
(b) The Investment Management Fee will be computed monthly based
on the net assets of the Fund as of the end of the month, after adjustment for
any purchases and repurchases of Interests during that month, and will be due
and payable in arrears within 30 business days after the end of such month.
(c) If this Agreement is terminated at any time during a month,
the Fund shall pay the Investment Adviser the pro rata amount of the Investment
Management Fee
for the month allocable to that portion of such month which is prior to the
termination of the Agreement (based on the number of days in such month).
(d) Except as is provided in paragraph 6 below, the Investment
Adviser is responsible for all costs and expenses associated with the provision
of its services hereunder including, but not limited to: expenses relating to
the selection and monitoring of Portfolio Managers; and fees of any consultants
or a Sub-Adviser retained by the Investment Adviser. The Investment Adviser
shall, at its own expense, maintain such staff and employ or retain such
personnel and consult with such other persons as may be necessary to render the
services required to be provided by the Investment Adviser or furnished to the
Fund under this Agreement. Without limiting the generality of the foregoing, the
staff and personnel of the Investment Adviser shall be deemed to include persons
employed or otherwise retained by the Investment Adviser or made available to
the Investment Adviser.
5. The Fund will, from time to time, furnish or otherwise make
available to the Investment Adviser such financial reports, proxy statements,
policies and procedures and other information relating to the business and
affairs of the Fund as the Investment Adviser may reasonably require in order to
discharge its duties and obligations hereunder.
6. Except as provided herein or in another agreement between the Fund
and the Investment Adviser, the Fund shall bear its own operating expenses and,
through its investment in the fund into which the Fund invests substantially all
of its assets (the "Master Fund"), its portion of the Master Fund's operating
expenses. These operating expenses include, but are not limited to: all
investment-related expenses (including, but not limited to, fees paid directly
or indirectly to Portfolio Managers, investment-related interest expenses, all
costs and expenses directly related to portfolio transactions and positions for
the Master Fund's account such as direct and indirect expenses associated with
the Master Fund's investments, including its investments in Portfolio Funds,
costs and expenses associated with background checks on Portfolio Managers, all
costs and expenses associated with retaining independent third parties to
provide risk management services to the Master Fund, transfer taxes and premiums
and taxes withheld on foreign dividends); any non-investment related interest
expense; fees and disbursements of any attorneys and accountants engaged on
behalf of the Fund and the Master Fund; entity-level taxes; audit and tax
preparation fees and expenses; administrative expenses and fees of the Master
Fund; custody and escrow fees and expenses of the Fund and the Master Fund; fees
pursuant to any administrative services agreement; the costs of an errors and
omissions/directors and officers liability insurance and a fidelity bond for the
Fund and the Master Fund; the Investment Management Fee; fees and travel-related
expenses of the Board of Managers of the Fund and the Master Fund who are not
employees of the Investment Adviser or any affiliate of the Investment Adviser;
all costs and charges for equipment or services used in communicating
information regarding the Fund's and Master Fund's transactions among the
Investment Adviser and/or Sub-Adviser and any custodian or other agent engaged
by the Fund; any extraordinary expenses; and such other expenses as may be
approved from time to time by the Board.
7. The compensation provided to the Investment Adviser pursuant to
paragraph 4(a) hereof shall be the entire compensation for the services provided
to the Fund hereunder and the expenses assumed by the Investment Adviser under
this Agreement.
8. The Investment Adviser 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 willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations hereunder, the Investment
Adviser, its directors, officers or employees and its affiliates, 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, for any act or
omission by the Investment Adviser or any of the Affiliates or by any
Sub-Adviser or for any loss suffered by the Fund.
9. (a) The Fund shall indemnify the Investment Adviser and its
directors, members, officers or employees and their respective affiliates,
executors, heirs, assigns, successors or other legal representatives (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 willful misfeasance, bad faith or gross
negligence of an Indemnified Person or the Indemnified Person's reckless
disregard of such duties, and in the case of criminal proceedings, unless such
Indemnified Person had reasonable cause to believe its actions were unlawful
(collectively, "disabling conduct"). Indemnification shall be made 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 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 defense
of any action or proceeding arising out of such performance or non-performance.
The Investment Adviser 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 paragraph 9.
(b) Notwithstanding any of the foregoing to the contrary, the
provisions of this paragraph 9 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, impose 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 paragraph 9 to the fullest extent permitted by law.
10. Nothing contained in this Agreement shall prevent the Investment
Adviser or any affiliated person of the Investment Adviser from acting as
investment adviser or manager for any other person, firm or corporation and,
except as required by applicable law (including Rule 17j-1 under the 1940 Act),
shall not in any way bind or restrict the Investment Adviser or any such
affiliated person from buying, selling or trading any securities or commodities
for their
own accounts or for the account of others for whom they may be acting. Nothing
in this Agreement shall limit or restrict the right of any member, officer or
employee of the Investment Adviser 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
other business whether of a similar or dissimilar nature.
11. This Agreement will take effect on the date first set forth above.
Unless earlier terminated pursuant to this paragraph, this Agreement shall
remain in effect for a period of two (2) years from such date and shall continue
in effect from year to year thereafter, so long as such continuance shall be
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; and provided that in either event such continuance is also
approved by a majority of 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 Adviser, either by majority vote of the
Board 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
Adviser may at any time, without payment of penalty, terminate this Agreement
upon sixty days' prior written notice to the Fund. This Agreement shall
automatically terminate in the event of its "assignment," as defined by the 1940
Act and the rules thereunder.
12. 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.
13. This Agreement may be amended only by the written agreement of the
parties. Any amendment shall be required to be approved by the Board and 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 or the rules and interpretations thereunder, any amendment shall also be
required to be approved by the vote of a "majority of the outstanding voting
securities of the Fund," as defined by the 1940 Act and the rules thereunder.
14. This Agreement shall be construed in accordance with the laws of
the State of placeStateNew York and the applicable provisions of the 1940 Act.
To the extent the applicable law of the State of placeStateNew York, or any of
the provisions herein, conflict with the applicable provisions of the 1940 Act,
the latter shall control.
15. The Fund represents that this Agreement has been duly approved by
the Board, including the vote of a majority of the Independent Managers, and by
the vote of a "majority of the outstanding voting securities of the Fund," as
defined by the 1940 Act and the rules thereunder.
16. The parties to this Agreement agree that the obligations of the
Fund under this Agreement shall not be binding upon any of the Managers, members
of the Fund or any officers, employees or agents, whether past, present or
future, of the Fund, individually, but are binding only upon the assets and
property of the Fund.
17. This Agreement embodies the entire understanding of the parties.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement on the day and year first above written.
OLD MUTUAL 2100 ABSOLUTE RETURN FUND, L.L.C.
By:
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Attest: Name:
Title:
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0000 XXXXX XXXX LLC
By:
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Attest: Name:
Title:
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