INVESTMENT ADVISORY AGREEMENT
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INVESTMENT ADVISORY AGREEMENT (the "Agreement"), dated May 8, 2006,
between RIC Coinvestment Fund LP (the "Fund"), a Delaware limited partnership,
and FIG Advisors LLC (the "Advisor"), a Delaware limited liability company.
Except as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms not defined herein shall have the meanings specified
in the Fund's Limited Partnership Agreement, dated May 8, 2006 (the "Partnership
Agreement").
In consideration of the mutual promises and agreements herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, it is agreed by and between the parties hereto as follows:
1. General.
The Advisor agrees, as more fully set forth herein, to act as a
investment advisor to the Fund with respect to the investment of the Fund's
assets and to supervise and arrange the purchase of securities for and the sale
of securities held in the investment portfolio of the Fund.
2. Duties and Obligations of the Advisor.
(a) Subject to the succeeding provisions of this section and
subject to the direction and control of the Board of Directors of the Fund (the
"Board of Directors"), the Advisor shall (i) act as investment advisor for and
supervise and make recommendations with respect to the investment of the Fund's
assets, subject to the Fund's restrictions and limitations on investments as set
forth in the Partnership Agreement, and shall research, make recommendations
with respect to purchasing and selling securities and other assets for the Fund
and vote, exercise consents and exercise all other rights appertaining to such
securities and other assets on behalf of the Fund; (ii) supervise continuously
the investment program of the Fund; (iii) arrange, subject to the provisions of
Section 3 hereof, for the purchase and sale of securities and other assets held
in the investment portfolio of the Fund and the financing thereof; (iv) except
to the extent administered by the General Partner of the Fund in accordance by
the Partnership Agreement, arrange for the administration of all other affairs
of the Fund and its Investment Affiliates and, in this regard, provide
supervision of third parties engaged in such administration; (v) maintain all of
the Fund's books and records other than those maintained by the General Partner
in accordance with the Partnership Agreement or by a third party administrator,
transfer agent, custodian or accountant; and (vi) provide the Fund with adequate
office space and all necessary office equipment and services.
(b) Subject to Section 2(f) hereof, in the performance of its
duties under this Agreement, the Advisor shall at all times conform to, and act
in
accordance with, any requirements imposed by (i) the provisions of the
Investment Company Act of 1940, as amended, including any rules or regulations
in force thereunder (the "1940 Act") and of the Investment Advisers Act of 1940,
as amended, including any Rules or Regulations in force thereunder
(collectively, the "Advisers Act"); (ii) any other applicable provision of law;
(iii) the provisions of the Partnership Agreement as amended from time to time;
(iv) the investment objective, policies and restrictions of the Fund as set
forth in the Partnership Agreement, as amended from time to time, and any
resolutions adopted by requisite approval of the Board of Directors and/or the
shareholders of the Fund, and (v) any other policies and determinations of the
Board of Directors of the Fund. In addition, the Advisor shall use its best
efforts to cause the Fund not to engage in any transaction involving any person
known to the Advisor to be subject to Sections 17(a), 17(d) or 17(e) of the 1940
Act with respect to the Fund such that any such person would violate any such
provision of the 1940 Act.
(c) The Advisor will pay the fees and compensation of the
Fund's officers and Directors who are "interested persons" (as defined in
Section 2(a)(19) of the 0000 Xxx) of the Fund, except that a majority of the
Directors that are not interested persons of the Fund (the "Independent
Directors") may approve reimbursement at cost for the compensation of such
officers and interested persons or Directors (other than Xxxxxx X. Xxxxx, Xxxxxx
X. Xxxxxxxx and Xxxxxx X. Xxxxxxx (together with their successors, collectively,
the "Principals") and the assistants of the Principals) allocable to time spent
on the legal, accounting and other administrative operations (other than the
provision of investment advice) of the Fund. In addition, the Advisor will bear
all costs and expenses of the Fund, not expressly stated in the sections below
to be borne by the Fund.
(d) The Fund agrees to reimburse the Advisor for the ordinary
operating expenses of the Fund and the Advisor for compensation (subject to
Section 2(c) and in any event other than for the Principals and their
assistants), rent and similar overhead expenses, including maintenance of the
Fund's offices, in connection with the management and advisory services provided
hereunder. In addition, the Fund will bear the expenses related to its
activities including, without limitation, the evaluation, acquisition,
ownership, sale or financing of any potential Portfolio Investment, taxes, fees
of auditors and counsel, expenses of the Board of Directors and annual meetings,
insurance, travel, litigation and indemnification expenses, administrative
expenses and, subject to the approval of the Board of Directors, any
extraordinary expenses. The expenses of the Fund generally described above shall
specifically include, without limitation:
(i) all costs and expenses, if any, incurred in
evaluating, developing, negotiating, structuring,
acquiring, owning, financing, disposing of or
otherwise dealing with Portfolio Investment whether
or not a transaction is consummated, including,
without limitation, accounting fees, consulting fees,
due diligence expenses, conference expenses,
subscriptions to trade and other publications,
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brokerage commissions and fees and other investment
costs incurred by or on behalf of the Fund, legal
fees, travel, transfer taxes, costs related to the
registration or qualification for sale of securities
and other out of pocket expenses, in each case to the
extent not paid for by the issuer of such securities;
(ii) without duplication, expenses incurred in connection
with out of pocket expenses related to monitoring
investments by the Fund, including, without
limitation, legal, travel, insurance, accounting,
custodial and safekeeping, consulting and auditing
expenses;
(iii) administrative, legal, custodial, accounting,
auditing, banking, professional, consulting and
appraisal expenses of the Fund including expenses
associated with the preparation of the Fund's
reports, financial statements, tax returns and
Schedule K 1s;
(iv) organizational expenses of the Fund not paid for by a
Portfolio Company;
(v) taxes and other governmental charges, fees and duties
payable by the Fund to federal, state, local and
other governmental agencies;
(vi) litigation related expenses and premiums for
insurance protecting the Fund and any Covered Persons
of the Fund from liabilities to third Persons in
connection with Fund affairs;
(vii) costs and expenses that are classified as
extraordinary expenses under generally accepted
accounting principles and Damages; and
(viii) costs and expenses incurred in connection with
winding up and liquidating the Fund
(such expenses, the "Operating Expenses") to the extent any Operating Expenses
are paid by the Advisor or any Affiliate thereof from its own funds, as the case
may be, and not otherwise reimbursed by any Portfolio Investment; provided,
however, that the Fund shall be obligated to reimburse the Advisor or its
affiliates, as applicable, only to the extent such Operating Expenses are
incurred out-of-pocket by such parties on behalf of the Fund. The amount of
Operating Expenses to be borne by the Fund is not subject to any maximum amount.
Notwithstanding anything to the contrary, losses incurred on the Fund's
investments, whether classified as expenses or otherwise, shall be borne by the
Fund.
(e) The Advisor shall give the Fund the benefit of its best
judgment and effort in rendering services hereunder, but the Advisor shall not
be liable for any act or omission or for any loss sustained by the Fund in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance,
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bad faith or gross negligence in the performance of its duties, or by reason of
its reckless disregard of its obligations and duties under this Agreement.
(f) From time to time, one or more of the investment companies
or accounts which the Advisor manages or advises may own the same investments as
the Fund. Investment decisions for the Fund are made independently from those of
such other investment companies or accounts; however, from time to time, the
same investment decision may be made for more than one company or account to the
extent the same is permitted under and in accordance with the 1940 Act. Subject
to the foregoing, when two or more investment companies or accounts managed by
the Advisor seek to purchase or sell the same securities, the securities
actually purchased or sold will be allocated among the companies and accounts on
a good faith equitable basis by the Advisor in its discretion in accordance with
the accounts' various investment objectives. In some cases, this system may
adversely affect the price or size of the position obtainable for the Fund. In
other cases, however, the ability of the Fund to participate in volume
transactions may produce better execution for the Fund.
3. Portfolio Transactions and Brokerage.
The Advisor shall, for the purchase and sale of the Fund's Portfolio
Investments, recommend that the Fund employ such securities brokers and dealers
as will, in the reasonable judgment of the Advisor, result in the Fund obtaining
the best net results taking into account such factors as price, including dealer
spread, the size, type and difficulty of the transaction involved, the firm's
general execution and operational facilities and the firm's risk in positioning
the securities involved. Consistent with this requirement, the Advisor is
authorized to direct the execution of the Fund's portfolio transactions to
dealers and brokers furnishing statistical information or research reasonably
deemed by the Advisor to be useful or valuable to the performance of its
investment advisory functions for the Fund.
4. Compensation of the Advisor.
In consideration of the mutual promises and agreements herein contained
and other good and valuable consideration, the Advisor shall provide to the Fund
the services described herein.
5. Indemnity.
(a) The Fund hereby agrees to indemnify the Advisor and each
of the Advisor's partners, directors, officers, employees and controlling
persons and the partners, directors, officers and employees thereof (including
any individual who serves at the Advisor's request as a director, officer,
partner, trustee or the like of any of the Fund's Portfolio Investments (each
such person being an "indemnitee") against any liabilities and expenses,
including amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and reasonable counsel fees reasonably incurred by
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such indemnitee in connection with the defense or disposition of any action,
suit or other proceeding, whether civil or criminal, before any court or
administrative, regulatory or investigative body or in connection with any
arbitration or other dispute resolution proceeding in which he may be or may
have been involved as a party or otherwise or with which he may be or may have
been threatened, while acting in any capacity set forth above in this Section 5
with respect to the services provided hereunder or thereafter by reason of his
having acted in any such capacity, except with respect to any matter as to which
he shall not have acted in good faith in the reasonable belief that his action
was in the best interest of the Fund or, in the case of any criminal proceeding,
as to which he shall have had reasonable cause to believe that the conduct was
unlawful; provided, however, that no indemnitee shall be indemnified hereunder
against any liability to any person or any expense of such indemnitee arising by
reason of (i) willful misfeasance (which shall include the conviction of any of
its senior officers of a felony), (ii) bad faith (including fraud), (iii) gross
negligence, (iv) reckless disregard of the duties involved in the conduct of his
position, (v) the material breach by the Advisor of this Agreement or (vi) the
payment to or receipt by the Advisor or its affiliates of benefits in violation
of this Agreement (the conduct referred to in such clauses (i) through (vi)
being sometimes referred to herein as "disabling conduct"). Notwithstanding the
foregoing, with respect to any action, suit or other proceeding voluntarily
prosecuted by any indemnitee as plaintiff, indemnification shall be mandatory
only if the prosecution of such action, suit or other proceeding by such
indemnitee was authorized by a majority of the Directors and a majority of the
Independent Directors.
(b) Notwithstanding the foregoing and subject to Section 5(c),
no indemnification shall be made hereunder unless there has been a determination
(i) by a final decision on the merits by a court or other body of competent
jurisdiction before whom the issue of entitlement to indemnification hereunder
was brought that such indemnitee is entitled to indemnification hereunder, or
(ii) in the absence of such a decision, by (A) a majority vote of a quorum of
those Independent Directors who are not parties to the proceeding ("Independent
Non-Party Directors") that the indemnitee is entitled to indemnification
hereunder, or (B) 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 hereunder.
All determinations that advance payments in connection with the expense of
defending any proceeding shall be authorized and made in accordance with Section
5(c) hereof.
(c) The Fund shall make advance payments in connection with
the expenses of defending any action with respect to which indemnification might
be sought hereunder (i) if the Fund receives a written affirmation by the
indemnitee of the indemnitee'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 (ii) if a majority of the Directors and a majority of
the Independent Directors 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: (i) the indemnitee shall provide
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adequate security for his undertaking, (ii) the Fund shall be insured against
losses arising by reason of any lawful advances, or (iii) a majority of a quorum
of the Independent Non-Party Directors, or if a majority vote of such quorum so
directs, independent legal counsel in a written opinion, 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 indemnitee
ultimately will be found entitled to indemnification.
(d) The rights accruing to any indemnitee under these
provisions shall not exclude any other right to which he may be lawfully
entitled.
6. Duration, Termination and Amendment.
(a) This Agreement shall become effective on the later of (i)
the date it is approved by the Partners of the Fund or (ii) the date first
written above and shall continue in effect for an initial period of two years
and thereafter from year to year, but only so long as such continuation is
specifically approved at least annually at a meeting of the Directors in
accordance with the requirements of the 1940 Act.
(b) This Agreement (i) may be terminated by the Advisor at any
time without penalty upon giving the Fund forty-five (45) days' prior written
notice (which notice may be waived by a majority of the Directors including a
majority of the Independent Directors) if the Fund is in breach of this
Agreement in any material respect and (ii) may be terminated on behalf of the
Fund at any time without penalty upon giving the Advisor sixty (60) days' prior
written notice (which notice may be waived by the Advisor) by the vote of a
majority of the Directors or by the vote of the holders of a "majority of the
voting securities" (as defined in the 0000 Xxx) of the Fund at the time
outstanding and entitled to vote. This Agreement shall terminate automatically
in the event of its assignment (as "assignment" is defined in the 1940 Act).
Termination shall not affect any rights either party may have against the other
hereunder as of the date of such termination.
(c) Any amendment to this Agreement (including any increase in
the compensation payable to the Advisor hereunder) must be approved in
accordance with the requirements of the 1940 Act and by a majority of the
Independent Directors.
7. Notices.
Any notice under this Agreement shall be in writing and shall be
delivered to the other party by hand or registered or certified mail, return
receipt requested, at such address as the other party may designate from time to
time for the receipt of such notice and shall be deemed to be received on the
earlier of the date actually received or on the third day after the postmark if
such notice is mailed first class postage prepaid.
8. Governing Law.
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This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, including without limitation, Sections 5-1401
and 5-1402 of the New York General Obligations Law and the New York Civil
Practice Laws and Rules 327(b).
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IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers as of the day and
the year first above written.
RIC COINVESTMENT FUND LP
By: RIC COINVESTMENT FUND GP LLC
By:
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Name: Xxxxxx X. Xxxxxxx
Title: Chief Operating Officer and
Secretary
FIG ADVISORS LLC
By: Fortress Investment Group LLC,
as managing member
By:
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Name: Xxxxxx X. Xxxxxxx
Title: Chief Operating Officer and
Secretary
