FORM OF
INVESTMENT MANAGEMENT AGREEMENT
THIS INVESTMENT MANAGEMENT AGREEMENT ("Agreement") is made as June ____,
2000 between XXXXXXXX-XXXXXXXXX INSTITUTIONAL INVESTORS FUND, LLC a Delaware
limited liability company ("Company"), on behalf of the Xxxxxxxx-Xxxxxxxxx
Emerging Countries Series ("Series") and XXXXXXXX-XXXXXXXXX CAPITAL MANAGEMENT,
a California limited partnership ("Manager").
WHEREAS, the Series is registered as an closed-end management investment
company under the Investment Company Act of 1940, as amended ("1940 Act");
WHEREAS, the Company desires to retain the Manager to furnish investment
advisory services to the Company on behalf of the Series;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT.
The Company hereby appoints the Manager to serve as investment
manager to the Series for the period and on the terms set forth in this
Agreement. The Manager accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided.
2. SERVICES.
(a) Subject to the supervision of the Company's Board of Trustees
("Board"), the Manager will provide a continuous investment program for the
Series, including investment research and management with respect to all
securities and investments and cash equivalents in the Series. The Manager will
determine from time to time what securities and other investments will be
purchased, retained or sold by the Company with respect to the Series. The
Manager will provide the services under this Agreement in accordance with the
Series' investment objective, policies and restrictions as stated in it's
prospectus and statement of additional information, as currently in effect and
as from time to time amended (collectively, the "Prospectus"), and resolutions
of the Board. The Manager further agrees that it:
(b) Will conform with all applicable rules and regulations of the
Securities and Exchange Commission and will in addition conduct its activities
under this Agreement in accordance with other applicable law.
(c) Will place all orders for the purchase and sale of portfolio
securities for the account of the Series with brokers or dealers selected by the
Manager. In executing portfolio transactions and selecting brokers or dealers,
the Manager will use its best efforts to seek on behalf of the Company and the
Series the best available price and execution. In assessing the best
overall terms available for any transaction, the Manager will consider all
factors it deems relevant, including the breadth of the market in the security,
the price of the security, the size of the order, the difficulty and risk of
execution, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis.
In evaluating the best overall terms available, and in selecting the
broker or dealer to execute a particular transaction, the Manager may also
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934, as amended) provided to
the Series and/or other accounts over which the Manager or any affiliate of the
Manager exercises investment discretion. The Manager is authorized to pay to a
broker or dealer who provides such brokerage and research services a commission
or spread for executing a portfolio transaction for the Series which is in
excess of the amount of commission or spread another broker or dealer would have
charged for effecting that transaction if, but only if, the Manager determines
in good faith that such commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer viewed in
terms of that particular transaction or in terms of the overall responsibilities
of the Manager to the Series and to the Company. The Manager may also select
brokers who sell shares of the Series to execute portfolio transactions. The
extent and continuation of these practices will be subject to periodic review by
the Board.
In executing portfolio transactions for the Series, the Manager may,
but will not be obligated to, aggregate the securities to be sold or purchased
with those of other mutual funds and its other clients where such aggregation is
not inconsistent with the policies set forth in the Prospectus, to the extent
permitted by applicable laws and regulations. In such event, the Manager will
allocate the securities so purchased or sold, and the expenses incurred in the
transaction, in the manner it considers to be the most equitable and consistent
with its fiduciary obligations to the Series and such other clients.
(d) Will maintain all books and records with respect to the
securities transactions of the Series, keep books of account with respect to the
Series and furnish the Board with such periodic and special reports as the Board
may request.
(e) Will treat confidentially and as proprietary information, all
records and other information relative to the Series, the Company, and its
members ("Investors") or those persons or entities who respond to inquiries
concerning investment in the Series, and will not use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder or under any other agreement with the Company except after
prior notification to and approval in writing by the Board, which approval will
not be unreasonably withheld and may not be withheld where the Manager may be
exposed to civil or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, or when
so requested by the Company and the Series. Nothing contained herein, however,
will prohibit the Manager from advertising to or soliciting the public generally
with respect to other products or services, including, but not limited to, any
advertising or
marketing via radio, television, newspapers, magazines or direct mail
solicitation, regardless of whether such advertisement or solicitation may
coincidentally include prior or present Investors or those persons or entities
who have responded to inquiries regarding the Series.
(f) Will obtain the prior written approval of the Board before
retaining the services of any subadviser to manage the assets and portfolio
investments of the Series.
3. SERVICES NOT EXCLUSIVE. The Manager will for all purposes herein be
deemed to be an independent contractor and will, unless otherwise expressly
provided herein or authorized by the Board from time to time, have no authority
to act for or represent the Company in any way or otherwise be deemed its agent.
The investment management services furnished by the Manager hereunder are not
deemed exclusive, and the Manager will be free to furnish similar services to
others so long as its services under this Agreement are not impaired thereby.
4. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Manager agrees that all records which it maintains for
the Company are the property of the Company and further agrees to surrender
promptly to the Company any such records upon the Company's request. In
addition, the Manager agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1
under the 1940 Act.
5. EXPENSES. During the term of this Agreement, the Manager will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage commissions, if
any) purchased for the Series.
6. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, the Series will pay the Manager and the Manager will
accept as full compensation therefor a fee, computed daily and paid monthly (in
arrears), at the annual rates set forth in Schedule A hereto. The Manager may
also from time to time agree to reduce its fees or absorb other operating
expenses to ensure that the expenses of an Investor do not exceed certain
limitations imposed by the Investor.
7. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to the Manager that: (i)
it is a limited liability company duly organized and existing and in good
standing under the laws of the State of Delaware and is duly qualified to
conduct its business in the State of Delaware and in such other jurisdictions
wherein the nature of its activities or its properties owned or leased makes
such qualification necessary; (ii) the Series is registered as a closed-end
management investment company under the 1940 Act; (iii) a registration statement
on Form N-2, on behalf of the Series is currently effective and will remain
effective, and any appropriate state securities law filings have been made and
will continue to be made; (iv) it is empowered under applicable laws and by its
Operating Agreement to enter into this Agreement; and (v) all requisite Company
actions have been taken to authorize it to enter into and perform this
Agreement.
(b) The Manager represents and warrants to the Company that: (i)
it is a limited partnership duly organized and existing and in good standing
under the laws of the State of California and is duly qualified to conduct its
business in the State of California and in such other jurisdictions wherein the
nature of its activities or its properties owned or leased makes such
qualification necessary; (ii) it is empowered under applicable laws and by its
partnership agreement to enter into and perform this Agreement; (iii) all
requisite partnership proceedings have been taken to authorize it to enter into
and perform this Agreement; and (iv) it is a registered Manager under the
Managers Act of 1940, as amended and applicable state laws.
8. LIMITATION OF LIABILITY; INDEMNIFICATION.
(a) The Manager will not be liable for any error of judgment or
mistake of law or for any loss suffered by the Company or the Series in
connection with the matters to which this Agreement relates, except for
liability resulting from willful misfeasance, bad faith or gross negligence on
the part of the Manager in the performance of its duties, or by reason of the
Manager's reckless disregard of its obligations and duties under this Agreement.
The Company or the Series will indemnify and hold harmless
the Manager from and against all liabilities, damages, costs and expenses that
the Manager may incur in connection with any action, suit, investigation or
proceeding arising out of or otherwise based on any action actually or allegedly
taken or omitted to be taken by the Manager with respect to the performance of
its duties or obligations hereunder or otherwise as Manager of the Company or
the Series; provided, however, that the Manager will not be entitled to
indemnification with respect to any liability to the Series, the Company or the
Investors by reason of willful misfeasance, bad faith or gross negligence on the
part of the Manager in the performance of its duties, or by reason of the
Manager's reckless disregard of its obligations and duties under this Agreement.
(b) No Trustee, officer, employee or agent of the Company or the
Series shall be subject to any personal liability whatsoever, in his or her
official or individual capacity, to any person, including the Manager, other
than the Series, the Company or the Investors, in connection with Company
property or the affairs of the Company, save only that arising from his or her
bad faith, willful misfeasance, gross negligence or reckless disregard of his or
her duty to such person; and all such persons shall look solely to the Company
property for satisfaction of claims of any nature against a trustee, officer,
employee or agent of the Company arising in connection with the affairs of the
Company. Moreover, the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to the Series shall be
enforceable against the assets and property of the Series only, and not against
the assets and property of any other series of the Company.
9. DURATION AND TERMINATION. This Agreement will become effective with
respect to the Series on the date first written above. Unless sooner terminated
as provided herein, this Agreement will continue in effect for a period of two
years from the date hereof. Thereafter, if not terminated, this Agreement will
continue in effect as to the Series for successive annual periods, provided such
continuance is specifically approved at least annually:
(a) by the vote of a majority of those members of the Board who are not
interested persons of any party to this Agreement, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the Board or by
vote of a majority of the outstanding voting securities of such the Series.
Notwithstanding the foregoing, this Agreement may be terminated as to the Series
at any time, without the payment of any penalty, by the Company (by vote of the
Board or by vote of a majority of the outstanding voting securities of the
Series), or by the Manager, upon not less than 60 days' written notice. This
Agreement will immediately terminate in the event of its assignment. (As used in
this Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" have the same meaning as the meaning of
such terms in the 1940 Act.)
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement will be
effective as to the Series until approved by vote of a majority of the
outstanding voting securities of the Series.
11. NOTIFICATION OF CHANGE OF PARTNERS. During the term of this
Agreement, the Manager will notify the Company of any change in the membership
of the Manager's partnership within a reasonable time after such change.
12. NOTICES. Notices of any kind to be given to the Manager hereunder
by the Company will be in writing and will be duly given if mailed, delivered or
communicated by answer back facsimile transmission to the Manager at 000 Xxxx
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, Facsimile: (000) 000-0000,
Attention: General Counsel, or at such other address or to such individual as
will be so specified by the Manager. Notices of any kind to be given to the
Company hereunder by the Manager will be in writing and will be duly given if
mailed or delivered to the Company at 000 Xxxx Xxxxxxxx, 00xx Xxxxx, Xxx Xxxxx,
Xxxxxxxxxx 00000, Facsimile: (000) 000-0000, Attention: Secretary, or at such
other address or to such individual as will be so specified by the Company to
the Manager.
13. MISCELLANEOUS.
(a) This Agreement constitutes the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter hereof.
(b) The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.
(c) If any provision of this Agreement is held or made invalid by
a court decision, statute, rule or otherwise, the remainder of this Agreement
will not be affected thereby.
(d) This Agreement will be binding upon and will inure to the
benefit of the parties hereto and their respective successors and will be
governed by the internal laws, and not the law of conflicts of laws, of the
state of California; provided that nothing herein will be construed in a manner
inconsistent with the 1940 Act, the Managers Act of 1940, as amended, or any
rule or regulation of the Securities and Exchange Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the date first above
written.
XXXXXXXX-XXXXXXXXX XXXXXXXX-XXXXXXXXX
INSTITUTIONAL INVESTORS CAPITAL MANAGEMENT
FUND, LLC
By: By: :
-------------------------- ----------------------
E. Xxxxx Xxxxx, Jr. E. Xxxxx Xxxxx, Jr.
Its Secretary Its General Counsel
SCHEDULE A
INVESTMENT MANAGEMENT FEES
The Manager will be compensated for its services under the Agreement with
respect to the Series at the following annual rates:
1.00% of the first $100 million of the Series' average daily net assets,
0.95% of the next $250 million; 0.90% of the next $250 million and 0.85% of the
Company's average daily net assets in excess of $600 million.
