Exhibit 2(g)(1)
FORM OF
INVESTMENT MANAGEMENT AGREEMENT
ENTERED INTO BETWEEN
MAGNETAR SPECTRUM FUND
AND
MAGNETAR FINANCIAL LLC
This Investment Management Agreement (the "Agreement") is entered into as
of November___, 2007 by and between Magnetar Spectrum Fund (the "Fund"), a
statutory trust duly organized and existing under the laws of the State of
Delaware, and Magnetar Financial LLC, a limited liability company duly organized
and existing under the laws of the State of Delaware (the "Investment Manager").
RECITALS:
The Fund is a closed-end management investment company registered under
the Investment Company Act of 1940 (the "1940 Act"); and
The Investment Manager is engaged principally in providing management and
investment advisory services and is registered as an investment adviser under
the Investment Advisers Act of 1940 (the "Advisers Act"); and
The Investment Manager is willing to provide management and investment
advisory services to the Fund on the terms and conditions set out below;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set out in this Agreement, the Fund and the Investment Manager agree as follows:
1. Investment Description; Appointment
(a) Investment Description. The Fund will invest and reinvest its assets
in accordance with the investment objective, policies and limitations specified
in the private placement memorandum filed with the Securities and Exchange
Commission (the "SEC") as part of the Fund's registration statement on Form N-2.
(b) Appointment of Investment Manager. The Fund appoints and retains the
Investment Manager to act as the investment adviser of the Fund and to furnish
the management and investment advisory services described below, subject to the
policies of, review by and overall control of the Board of Trustees of the Fund
(the "Board of Trustees"), for the period and on the terms and conditions set
out in this Agreement. The Investment Manager accepts such appointment and
agrees during such period, at its own expense, to render, or arrange for the
rendering of, such services and to assume the obligations set out in this
Agreement for the compensation provided for in this Agreement. The Investment
Manager for all purposes in this Agreement will be deemed to be an independent
contractor.
2. Duties of the Investment Manager
(a) Management Services.
(1) The Investment Manager will perform, or arrange for an
affiliate to perform in accordance with Section 7 of this
Agreement, the management services necessary for the operation
of the Fund. The Investment Manager will provide the Fund with
office space, facilities, equipment and necessary personnel
(which may be those of an affiliate) and such other services
as the Investment Manager, subject to review by the Board of
Trustees, from time to time will determine to be necessary or
useful to perform its obligations under this Agreement. The
Investment Manager, also on behalf of the Fund, will conduct
affairs with custodians, administrators, dividend disbursing
agents, other shareholder servicing agents, accountants,
attorneys, underwriters, brokers and dealers, corporate
fiduciaries, insurers, banks and such other persons in any
such other capacity deemed to be necessary or desirable.
(2) The Investment Manager will, subject to the supervision of the
Board of Trustees, perform various services for the Fund,
including but not limited to: (i) preparing all general
shareholder communications, including shareholder reports;
(ii) conducting shareholder relations; (iii) maintaining the
Fund's existence and its records; (iv) developing and
implementing, if appropriate, management and shareholder
services designed to enhance the value or convenience of the
Fund as an investment vehicle; (v) overseeing the
determination and publication of the Fund's net asset value in
accordance with the Fund's policy as adopted from time to time
by the Board of Trustees; (vi) overseeing the preparation and
filing of the Fund's federal, state and local income tax
returns and any other required tax returns; (vii) reviewing
the appropriateness of and arranging for payment of the Fund's
expenses; (viii) preparing (or overseeing the preparation) for
review and approval by officers of the Fund financial
information for the Fund's semi-annual and annual reports,
proxy statements and other communications with shareholders
required or otherwise to be sent to Fund shareholders, and
arrange for the printing and dissemination of such reports and
communications to shareholders; (ix) providing and
administering a compliance program pursuant to Rule 38a-1
under the 1940 Act; (x) preparing (or overseeing the
preparation) for review by an officer of the Fund the Fund's
periodic financial reports required to be filed with the SEC
on Form N-SAR, N-CSR and such other reports, forms and
filings, as may be mutually agreed upon; (xi) preparing
reports relating to the business and affairs of the Fund as
may be mutually agreed upon and not otherwise appropriately
prepared by the Fund's custodian, counsel or auditors; (xii)
making such reports and recommendations to the Board of
Trustees concerning the performance of the independent
accountants as the Board of Trustees may reasonably request or
deems appropriate; (xiii) making such reports and
recommendations to the Board of Trustees concerning the
performance and fees of the Fund's custodian and
administrator, or other Fund service providers as the Board of
Trustees may reasonably request or deems appropriate; (xiv)
overseeing and reviewing calculations of fees paid to the
Fund's service providers; (xv) reviewing implementation of any
share purchase programs authorized by the Board of Trustees;
(xvi) determining the amounts available for distribution as
dividends
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and distributions to be paid by the Fund to its shareholders;
(xvii) preparing and arranging for the printing of dividend
notices to shareholders; (xviii) providing the Fund's dividend
disbursing agent and custodian with such information as is
required for such parties to effect the payment of dividends
and distributions; (xix) preparing such information and
reports as may be required by any party from which the Fund
borrows funds; (xx) providing such assistance to the custodian
and the Fund's counsel and auditors as generally may be
required to properly carry on the business and operations of
the Fund; and (xxi) assisting in the preparation and filing of
any Forms 3, 4, and 5 pursuant to Section 16 of the Securities
Exchange Act of 1934 and Section 30(h) of the 1940 Act for the
officers and Trustees of the Fund, such filings to be based on
information provided by those persons.
(3) The Investment Manager will authorize and permit any of its
principals, officers and employees who may be elected or
appointed as trustees or officers of the Fund to serve in the
capacities in which they are elected or appointed. Services to
be furnished by the Investment Manager under this Agreement
may be furnished through the medium of any of such principals,
officers, or employees. The Investment Manager generally will
monitor the Fund's compliance with investment policies and
restrictions as set out in filings made by the Fund under the
federal securities laws. The Investment Manager will make
reports to the Board of Trustees of its performance of
obligations under this Agreement and furnish advice and
recommendations with respect to such other aspects of the
business and affairs of the Fund as the Fund will determine to
be desirable.
(b) Investment Advisory Services. Subject to the supervision, direction
and approval of the Board of Trustees, the Investment Manager will conduct a
continual program of investment, evaluation, sale, and reinvestment of the
Fund's assets. The Investment Manager is authorized, in its sole discretion, to:
(i) obtain and evaluate pertinent economic, financial, and other information
affecting the economy generally and certain investment assets as such
information relates to securities or other financial instruments that are
purchased for or considered for purchase by the Fund; (ii) make investment
decisions for the Fund; (iii) place purchase and sale orders for portfolio
transactions on behalf of the Fund, lend securities and manage otherwise
uninvested cash assets of the Fund; (iv) arrange for the pricing of Fund
securities; (v) execute account documentation, agreements, contracts and other
documents as may be requested by brokers, dealers, counterparties and other
persons in connection with the Investment Manager's management of the assets of
the Fund (in such respect, and only for this limited purpose or to the extent
expressly stated elsewhere in this Agreement, the Investment Manager will act as
the Fund's agent and attorney-in-fact); (vi) employ, directly or indirectly,
professional portfolio managers and securities analysts who provide research
services to the Fund; and (vii) make decisions with respect to the use by the
Fund of borrowing for leverage or other investment purposes. The Investment
Manager will in general take such action as is appropriate to effectively manage
the Fund's investment practices. In addition:
(1) The Investment Manager will maintain and preserve the records
specified in Section 15 of this Agreement and any other records related to
the Fund's transactions as are required under any applicable state or
federal securities law or regulation including the 1940 Act and the
Advisers Act.
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(2) The Investment Manager will comply in all material respects with
any procedures provided from time to time to the Investment Manager by the
Fund. The Investment Manager will notify the Fund as soon as reasonably
practicable upon detection of any material breach of such procedures. In
this connection, the Investment Manager shall provide reasonable
assistance to the Fund's Chief Compliance Officer (the "CCO") in respect
of the CCO's initial and periodic reviews of those aspects of the
Investment Manager's compliance program relevant to the Fund and provide
prompt reporting to the CCO of material compliance matters relevant
thereto (as the same are defined for purposes of Rule 38a-1 of the 1940
Act).
(3) The Investment Manager will maintain a written code of ethics
(the "Code of Ethics") pursuant to Rule 17j-1 under the 1940 Act, a copy
of which will be provided to the Fund, and will institute procedures
reasonably necessary to prevent Access Persons (as defined in Rule 17j-1)
from violating its Code of Ethics. The Investment Manager will follow such
Code of Ethics in performing its services under this Agreement.
(4) The Investment Manager will monitor, to the extent not monitored
by the Trust's administrator or other agent, the Trust's compliance with
its investment and tax guidelines.
(5) The Investment Manager will process and respond to class action
lawsuits relating to the portfolio securities of the Fund and any proceeds
to the Fund from such lawsuits.
3. Information and Reports
(a) The Investment Manager agrees to make available to the Board of
Trustees the following:
(1) periodic reports on the investment performance of the Fund; and
(2) additional reports and information related to the Investment
Manager's duties under the Agreement as the Board of Trustees may
reasonably request.
(b) The Investment Manager will notify the Fund of any additional, removed
or substituted managing member of the Investment Manager within a reasonable
time of such addition, removal or substitution.
4. Standard of Care
The Investment Manager will exercise its best judgment, act in good faith,
use reasonable care and act in a manner consistent with applicable federal and
state laws and regulations in rendering the services it agrees to provide under
this Agreement. The Investment Manager will 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 the management of the Fund, except for willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of
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reckless disregard of its obligations and duties under this Agreement (such
conduct, "Disabling Conduct").
5. Indemnification
(a) The Fund will indemnify the Investment Manager and any officer,
director, member, manager, employee, shareholder, assign, representative, agent
or affiliate of any such person with respect to any act or omission as long as
(i) such person's activities do not constitute Disabling Conduct and (ii) there
has been a determination (a) by a final decision on the merits by a court or
other body of competent jurisdiction before whom the issue of entitlement to
indemnification was brought that such indemnitee is entitled to indemnification
or, (b) in the absence of such a decision, by (1) a majority vote of a quorum of
those Trustees who are neither "interested persons" of the Fund (as defined in
Section 2(a)(19) of the Investment Company Act) nor parties to the proceeding,
that the indemnitee is entitled to indemnification (the "Disinterested Non-Party
Trustees"), or (2) if such quorum is not obtainable or even if obtainable, if
such majority so directs, independent legal counsel in a written opinion
concludes that the indemnitee should be entitled to indemnification (each an
"Indemnified Person," and collectively, the "Indemnified Persons"). A successful
claim for indemnification could reduce the Fund's assets available for
distribution to the shareholders. Notwithstanding the foregoing, with respect to
any action, suit or other proceeding voluntarily prosecuted by any Indemnified
Person as plaintiff, indemnification shall be mandatory only if the prosecution
of such action, suit or other proceeding by such Indemnified Person was
authorized by a majority of the Trustees. All determinations to make advance
payments in connection with the expense of defending any proceeding shall be
authorized and made in accordance with the immediately succeeding paragraph (b)
below.
(b) The Fund shall make advance payments in connection with the expenses
of defending any action with respect to which indemnification might be sought
hereunder if the Fund receives a written affirmation by the Indemnified Person
of the Indemnified Person's good faith belief that the standards of conduct
necessary for indemnification have been met and a written undertaking to
reimburse the Fund unless it is subsequently determined that he is entitled to
such indemnification and if a majority of the Trustees determine that the
applicable standards of conduct necessary for indemnification appear to have
been met. In addition, at least one of the following conditions must be met: (1)
the Indemnified Person shall provide adequate security for his undertaking, (2)
the Fund shall be insured against losses arising by reason of any lawful
advances, (3) a majority of a quorum of the Disinterested Non-Party Trustees, or
if such quorum is not obtainable or even if obtainable, if such majority so
directs, independent legal counsel, shall conclude, based on a review of readily
available facts (as opposed to a full trial-type inquiry), that there is
substantial reason to believe that the Indemnified Person ultimately will be
found entitled to indemnification or (4) if there is not a Disinterested
Non-Party Trustee, the Indemnified Person provides the written affirmation
referred to above.
(c) The rights accruing to any Indemnified Person under these provisions
shall not exclude any other right to which he may be lawfully entitled.
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6. Investment Manager's Duties Regarding Fund Transactions
(a) Placement of Orders. The Investment Manager will take all actions that
it considers necessary to implement the investment policies of the Fund, and, in
particular, to place all orders for the purchase or sale of securities or other
investments for the Fund with brokers or dealers the Investment Manager, in its
sole discretion, selects. To that end, the Investment Manager is authorized as
the Fund's agent to give instructions to the Fund's custodian as to deliveries
of securities or other investments and payments of cash for the Fund's account.
In connection with the selection of brokers or dealers and the placement of
purchase and sale orders, the Investment Manager is subject to the supervision
of the Board of Trustees and is directed at all times to seek to obtain best
execution and price within the policy guidelines determined by the Board of
Trustees, as may be amended from time to time, and is subject to provisions (b),
(c) and (d) of this Section 6. (b) Selection of Brokers and Dealers. To the
extent permitted by the policy guidelines adopted by the Fund, in the selection
of brokers and dealers to execute portfolio transactions, the Investment Manager
is authorized to consider not only the available prices and rates of brokerage
commissions, but also other relevant factors, which may include, without
limitation: the execution capabilities of the brokers and dealers; the research,
custody, and other services provided by the brokers and dealers that the
Investment Manager believes will enhance its general portfolio management
capabilities; the size of the transaction; the difficulty of execution; the
operational facilities of these brokers and dealers; the risk to a broker or
dealer of positioning a block of securities; and the overall quality of
brokerage and research services provided by the brokers and dealers. In
connection with the foregoing, the Investment Manager is specifically authorized
to pay those brokers and dealers who provide brokerage and research services to
the Investment Manager a higher commission than that charged by other brokers
and dealers if the Investment Manager determines in good faith that the amount
of the commission is reasonable in relation to the value of the services in
terms of either the particular transaction or in terms of the Investment
Manager's overall responsibilities with respect to the Fund and to any other
client accounts or portfolios that the Investment Manager advises.
(c) Soft Dollar Arrangements. On an ongoing basis, but not less often than
annually, the Investment Manager will identify and provide a written description
to the Board of Trustees of "soft dollar" arrangements that the Investment
Manager maintains with respect to the Fund or with brokers or dealers that
execute transactions for the Fund, and of all research and other services
provided to the Investment Manager by a broker or dealer (whether prepared by
such broker or dealer or by a third party) as a result, in whole or in part, of
the direction of Fund transactions to the broker or dealer.
(d) Aggregated Transactions. On occasions when the Investment Manager
deems the purchase or sale of a security or other financial instrument to be in
the best interests of both the Fund and other client accounts or portfolios that
the Investment Manager manages, the Investment Manager is authorized, but not
required, to aggregate purchase and sale orders for securities or other
financial instruments held (or to be held) by the Fund with similar orders being
made on the same day for other client accounts or portfolios that the Investment
Manager manages. When an order is so aggregated, the Investment Manager may
allocate the
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recommendations or transactions among all accounts and portfolios for whom the
recommendation is made or the transaction is effected on a basis that the
Investment Manager reasonably considers equitable and consistent with its
fiduciary obligations to the Fund and its other clients, subject at all times to
the allocation policies and procedures of the Fund. The Investment Manager and
the Fund recognize that in some cases this procedure may adversely affect the
size of the position obtainable for the Fund.
7. Delegation
Subject to the requirements of the 1940 Act, the Investment Manager may
enter into contracts with one or more parties, including without limitation
affiliates of the Investment Manager, to provide any of the services described
herein on such terms as the Investment Manager will determine necessary,
desirable or appropriate, provided that in each case the Investment Manager
shall supervise the activities of such parties and further provided that such
contracts impose all conditions to which the Investment Manager is subject to
hereunder and that such contracts are entered into in accordance with and meet
all the applicable requirements of the 1940 Act.
8. Compensation
For the services rendered, the facilities furnished and the expenses
assumed by the Investment Manager under this Agreement, the Fund will pay to the
Investment Manager at the end of each calendar month a management fee,
calculated and payable monthly in arrears, at the annual rate of 2.00% of the
Fund's monthly net assets. For purposes of this Agreement, the net asset value
of the Fund will be calculated as of the last business day of each month in
accordance with the valuation policies and guidelines approved from time to time
by the Board of Trustees. The management fee for the period from the Effective
Date (defined in Section 12(a)) of this Agreement to the end of the month during
which the Effective Date occurs will be prorated according to the proportion
that such period bears to the full monthly period. Upon any termination of this
Agreement before the end of a month, the management fee for such part of that
month will be prorated according to the proportion that such period bears to the
full monthly period and will be payable upon the date of termination of this
Agreement.
9. Expenses
(a) The Investment Manager. Except as may otherwise be provided in Section
9(b) of this Agreement, the Investment Manager will: (i) provide the staff and
personnel necessary to perform its obligations under this Agreement, assume and
pay or cause to be paid all expenses incurred in connection with the maintenance
of such staff and personnel, and, at its own expense, provide the office space,
facilities, equipment and necessary personnel that it is obligated to provide
under this Agreement; and (ii) pay, or cause affiliates to pay, compensation of
all officers of the Fund and all Trustees of the Fund who are "interested
persons" of the Fund (as defined in the 1940 Act).
(b) The Fund. The Fund will bear all other expenses to be incurred in its
operation, including, but not limited to: (i) interest and taxes; (ii) brokerage
commissions and other costs in
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connection with the purchase or sale of securities and other investment
instruments; (iii) portfolio transaction-related fees and expenses; (iv) fees
and expenses of the Fund's trustees who are not "interested persons" of the
Fund, including reimbursement for all of their out-of-pocket expenses related to
attendance at Board of Trustees or committee meetings; (v) legal and audit
expenses; (vi) custodian, administrative, fund accounting, registrar, transfer
agent and dividend disbursing agent fees and expenses; (vii) fees and expenses
related to the registration and qualification of the Fund and the Fund's shares
for distribution under state and federal securities laws; (viii) expenses of
printing and mailing reports and notices and proxy material to shareholders of
the Fund; (ix) all other expenses incidental to holding meetings of the Fund's
shareholders, including proxy solicitations in connection with such meetings;
(x) insurance premiums for fidelity bond, directors and officers/errors and
omissions insurance policies, and other coverage; (xi) management fees; (xii)
expenses of typesetting for printing private placement memorandum and any
supplements thereto; (xiii) expenses of printing and mailing private placement
memorandums and any supplements thereto; (xiv) compensation related to services
of the Fund's CCO; (xv) all costs and expenses associated with periodic tender
offers; (xvi) expenses incurred or undertaken on behalf of the Fund by the
Investment Manager or any affiliates and approved by the Board of Trustees as
being reasonably related to the organization, offering and capitalization of the
Fund and (xvii) such non-recurring or extraordinary expenses as may arise,
including those relating to actions, suits or proceedings to which the Fund is a
party and legal obligations pursuant to which the Fund may have to indemnify the
Fund's trustees, officers, employees and/or agents with respect to these
actions, suits or proceedings. If the Investment Manager or any of its
affiliates, in accordance with Section 7, provides accounting services to the
Fund, the Fund will reimburse the Investment Manager and its affiliates for
their costs in providing such accounting services to the Fund using a
methodology for determining costs approved by the Board of Trustees.
10. Services to Other Companies or Accounts
The Fund understands that the Investment Manager and its affiliates (in
accordance with Section 7 of this Agreement) now act, will continue to act and
may act in the future as investment manager, adviser, general partner or
managing member to fiduciary and other managed accounts, and as an investment
manager or adviser to other investment companies, including, but not limited to,
offshore entities or private accounts. The Fund understands that the persons
employed, directly or indirectly, by the Investment Manager to assist in the
performance of the Investment Manager's duties under this Agreement may not
devote their full time to such service, and that nothing contained in this
Agreement will be deemed to limit or restrict the right of the Investment
Manager to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature. This Agreement will not in any way
limit or restrict the Investment Manager or any of its affiliates, principals,
officers, employees, or agents from buying, selling or trading any securities or
other investment instruments for its or their own account or for the account of
others for whom it or they may be acting, so long as such activities do not
adversely affect or otherwise impair the performance by the Investment Manager
of its duties and obligations under this Agreement.
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11. Custody
Nothing in this Agreement will require the Investment Manager to take or
receive physical possession of cash, securities, or other investments of the
Fund.
12. Term of Agreement; Termination of Agreement; Amendment of Agreement
(a) Term. This Agreement will become effective upon the acceptance into
the Fund of investment moneys (the "Effective Date"), and, unless terminated in
accordance with its terms, will continue for an initial two-year term and after
that initial two-year term so long as such continuance is specifically approved
at least annually as required by the 1940 Act.
(b) Termination. This Agreement may be terminated, without penalty, (i) by
the Board of Trustees or by vote of holders of a majority of the outstanding
shares of the Fund upon sixty (60) days' prior written notice to the Investment
Manager or (ii) by the Investment Manager upon sixty (60) days' prior written
notice to the Fund. This Agreement also will terminate automatically in the
event of its "assignment," as defined in the 1940 Act and the rules under the
1940 Act, except that to the extent consistent with the Advisers Act and the
1940 Act, without the notice to or consent of the Fund, the Investment Manager
may be reconstituted or reorganized into any other form of business entity.
(c) Amendment. This Agreement may be amended in writing by mutual consent
and in conformity with the requirements of the 1940 Act and the rules under the
1940 Act.
13. Use of the Word "Magnetar"
It is understood and agreed that the word "Magnetar" is the Investment
Manager's property for copyright and other purposes. The Fund further agrees
that the word "Magnetar" may freely be used by the Investment Manager for other
investment companies, entities or products. The Fund further agrees that, in the
event that the Investment Manager shall cease to act as an investment adviser to
the Fund, the Fund shall promptly take all necessary and appropriate action to
change its name to one that does not include the word "Magnetar"; provided,
however, that the Fund may continue to use such name if the Investment Manager
consents in writing to such use.
14. Cooperation with Regulatory Authorities or Other Actions
The parties to this Agreement each agree to cooperate in a reasonable
manner with each other in the event that any of them should become involved in a
legal, administrative, judicial or regulatory action, claim, or suit as a result
of performing its obligations under this Agreement.
15. Records
(a) Maintenance of Records. The Investment Manager undertakes and agrees
to maintain, in the form and for the period required by Rule 31a-2 under the
1940 Act, all records relating to the Fund's investments that are required to be
maintained by the Fund pursuant to the 1940 Act
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with respect to the Investment Manager's responsibilities under this Agreement
for the Fund (the "Fund's Books and Records").
(b) Ownership of Records. The Investment Manager agrees that the Fund's
Books and Records are the Fund's property and agrees to surrender promptly to
the Fund the Fund's Books and Records upon the request of the Fund. The
Investment Manager may, however, retain copies of the records at its own cost.
The Fund's Books and Records will be made available, within two (2) business
days of a written request, to the Fund's accountants or auditors during regular
business hours at the Investment Manager's offices. The Fund or its authorized
representatives will have the right to copy any records in the Investment
Manager's possession that pertain to the Fund. These books, records,
information, or reports will be made available to properly authorized government
representatives consistent with state and federal law and/or regulations. In the
event of the termination of this Agreement, the Fund's Books and Records will be
returned to the Fund. The Investment Manager agrees that the policies and
procedures it has established for managing the Fund, including, but not limited
to, all policies and procedures designed to ensure compliance with federal and
state regulations governing the adviser/client relationship and management and
operation of the Fund, will be made available for inspection by the Fund or its
authorized representatives upon reasonable written request within two (2)
business days.
16. Conflicts with Fund's Governing Documents and Applicable Laws
Nothing contained in this Agreement will be deemed to require the Fund to
take any action contrary to the Fund's Agreement and Declaration of Trust or
By-laws, as they may be amended and/or restated from time to time, or any
applicable statute or regulation, or to relieve or deprive the Board of Trustees
of its responsibility for and control of the conduct of the affairs of the Fund.
17. Survival
All representations and warranties made by the Investment Manager and the
Fund in this Agreement will survive for the duration of this Agreement and the
parties to this Agreement will notify each other in writing immediately upon
becoming aware, but in no event later than five (5) days after becoming aware,
that any of the foregoing representations and warranties are no longer true.
18. Severability
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 as a result. As used in this Agreement, terms will have the same
meaning as such terms have in the 1940 Act. In the event that the effect of a
requirement of the federal securities laws reflected in any provision of this
Agreement is made less restrictive by a rule, regulation or order of the SEC,
whether of special or general application, such provision may be deemed to
incorporate the effect of such rule, regulation or order. This Agreement may be
signed in counterpart.
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19. Definitions
The terms "assignment" and " and "interested person," when used in this
Agreement, will have the respective meanings specified in Section 2(a) of the
1940 Act and the rules under the 1940 Act. The term "majority of the outstanding
shares" as used in this Agreement means the lesser of (a) sixty-seven percent
(67%) or more of the voting shares present at a meeting if more than fifty
percent (50%) of these voting shares are present or represented by proxy, or (b)
more than fifty percent (50%) of the outstanding voting shares.
20. Limitation of Liability of the Fund and the Shareholders
The name "Magnetar Spectrum Fund" is the designation of the Fund for the
time being under the Agreement and Declaration of Trust and all persons dealing
with the Fund must look solely to the property of the Fund for the enforcement
of any claims against the Fund, as none of the Trustees, officers, agents or
shareholders assume any personal liability for obligations entered into on
behalf of the Fund.
21. Use of Name
The Fund may use any name that includes the word "Magnetar" only for so
long as this Agreement or any other agreement between the Investment Manager or
any affiliate of the Investment Manager and the Fund or any extension, renewal
or amendment of this Agreement or such other agreement remains in effect,
including any similar agreement with any organization that succeeds to the
Investment Manager's business as investment adviser. At such time as such an
agreement is no longer be in effect, the Fund will (to the extent that it
lawfully can) cease to use such name or any other name indicating that it is
advised by or otherwise connected with the Investment Manager or any
organization that has succeeded to the Investment Manager's business.
22. Miscellaneous
(a) The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions in the
Agreement or otherwise affect their construction of effect. This Agreement may
be executed in one or more counterparts, each of which will be deemed an
original, and all of such counterparts together will constitute one and the same
instrument.
(b) Any question or interpretation of any term or provision in this
Agreement having a counterpart in or otherwise derived from a term or provision
of the 1940 Act will be resolved by reference to such term or provision in the
1940 Act and to interpretations thereof, if any, by the United States Courts or
in the absence of controlling decision in any such court, by rules, regulation
or orders of the SEC issued pursuant to the 1940 Act. In addition, where the
effect of a requirement of the 1940 Act reflect in any provision of this
Agreement is modified or interpreted by applicable order or orders of the SEC or
any rules or regulations adopted by, or
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interpretative releases of, the SEC thereunder, such provision will be deemed to
incorporate the effect of such order, rule, regulation or interpretative
release.
(c) This Agreement will be governed by, construed under and interpreted
and enforced in accordance with the laws of the state of Delaware, without
regard to choice of law or conflicts of law principals, provided that nothing in
this Agreement will be construed in a manner inconsistent with the 1940 Act, or
in a manner that would cause the Trust to fail to comply with the requirements
of Subchapter M of the Code.
IN WITNESS WHEREOF, the parties to this Agreement have executed and
delivered this Agreement as of the date first above written.
MAGNETAR SPECTRUM FUND
By:
-------------------------
Name:
Title:
MAGNETAR FINANCIAL LLC
By:
Title:
By:
-------------------------
Name:
Title:
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