INVESTMENT ADVISORY AGREEMENT
by and between
OLD FIELD MASTER FUND, LLC
AND
MARWOOD ALTERNATIVE ASSET MANAGEMENT LLC
AGREEMENT made as of the 23rd day of August, 2006 between Marwood Alternative
Asset Management LLC, a limited liability company organized under the laws of
the State of Delaware (the "Adviser"), and Old Field Master Fund, LLC, a limited
liability company organized under the laws of the State of Delaware (the
"Company").
RECITALS
WHEREAS, the Company is engaged in business as a closed-end, non-
diversified, management investment company and is so registered under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser is engaged in the business of rendering investment
management and advisory services and is registered under the Investment
Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Company desires to retain the Adviser to render management
and investment advisory services in the manner and on the terms and
conditions hereinafter set forth; and
WHEREAS, the Adviser desires to be retained to perform services on said
terms and conditions;
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF THE ADVISER.
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The Board of Managers of the Company (collectively the "Board" and
individually a "Manager") hereby appoints the Adviser to act as manager and
investment adviser for the Company for the period and on the terms herein set
forth. The Adviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.
2. DUTIES AND RESPONSIBILITIES OF THE ADVISER.
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(a)Investment Advisory Services.
The Adviser shall:
(i) develop, implement and supervise a continuous investment program for the
Company in a manner consistent with the investment objectives and policies of
the Company;
(ii) provide advice and recommendations to the Company with respect to its
investments, investment policies and purchases and sales of securities and
other assets;
(iii)arrange for the purchase and sale of such securities and assets with the
Company's administrator;
(iv) specifically allocate Company assets among investment entities,
including hedge funds, and separate accounts ("Portfolio Funds"), cash and
other securities and investments and regularly evaluate each Portfolio Fund
to determine whether its investment program is consistent with the Company's
investment objective, and regularly evaluate whether each Portfolio Fund's
performance and other criteria the Adviser deems applicable are satisfactory;
(v) specifically reallocate Company assets among Portfolio Funds, redeem the
Company's investments with Portfolio Funds and select additional Portfolio
Funds subject in each case to the ultimate supervision of, and any policies
established by, the Board; and
(vi) take such further action as it shall deem necessary or appropriate in
its capacity as Adviser.
The Adviser is authorized, subject to the approval of the Board and interest
holders of the Company (the "Interestholders"), to retain one of its affiliates
to provide any or all of the investment advisory services required to be
provided to the Company or to assist the Adviser in providing these services,
subject to the requirement that the Adviser supervise the rendering of any such
services to the Company by its affiliates. The Adviser also may, subject to
Board approval and supervision and, if required in the 1940 Act, the approval of
Interestholders, retain one or more sub-advisers that are not affiliated with
the Adviser, subject to the Adviser's supervision.
(b) Reports to the Company.
The Adviser shall furnish to, or place at the disposal of, the Company such
information, reports, evaluations, analyses and opinions as the Company may, at
any time or from time to time, reasonably request or as the Adviser may deem
helpful to the Company.
(c) Administration Services, Personnel, Office Space, and Facilities of
Adviser.
The Adviser, at its own expense, shall furnish or provide and pay the cost
of: accounting and legal support services; provision of office space, personnel,
telephone and utilities; general supervision of the entities that are retained
by the Company to provide accounting services, investor services and custody
services to the Company; assisting in the drafting and updating of the Company's
registration statement, including its offering memorandum; reviewing, approving
and assisting in the preparation of regulatory filings with the Securities and
Exchange Commission (the "Commission") and state securities regulators and other
Federal and state regulatory authorities; preparing reports to and other
informational materials for members of the Company ("Members") and assisting in
the preparation of proxy statements and other Member communications; monitoring
the Company's compliance with Federal and state regulatory requirements (other
than those relating to investment compliance); reviewing accounting records and
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financial reports of the Company, assisting with the preparation of the
financial reports of the Company and acting as liaison with the Company's
administrator, legal counsel and independent auditors; assisting in the
preparation and filing of Company tax returns; assisting, coordinating and
organizing meetings of the Board and meetings of Members as may be called by the
Board from time to time; preparing materials and reports for use in connection
with meetings of the Board; maintaining and preserving those books and records
of the Company not otherwise required to be maintained by the Company's other
administrator or custodian; reviewing and arranging for payment of the expenses
of the Company; assisting the Company in conducting periodic repurchases of
interests in the Company ("Interests"); and such other services that the Company
and Adviser shall agree to from time to time, as the Adviser requires in the
performance of its investment advisory and other obligations under this
Agreement.
3. ALLOCATION OF EXPENSES.
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(a) Expenses Paid by Adviser.
The Adviser shall bear the cost of rendering the investment management and
supervisory services and administration and other services set forth in
paragraph 2(c).
(b) Expenses Paid by the Company.
The Company assumes and shall pay or cause to be paid all other expenses of
the Company, including, without limitation: all costs and expenses directly
related to portfolio transactions and positions for the Company's account,
including, but not limited to, brokerage commissions; redemption fees; fees paid
to the underlying Portfolio Funds' management, including management and
performance fees or allocations, if any; research fees, interest and commitment
fees on loans and debit balances, borrowing charges on securities sold short,
borrowing charges on amounts borrowed to pay redemptions, dividends on
securities sold but not yet purchased, custodial fees, margin fees, transfer
taxes and premiums, taxes withheld on foreign dividends and indirect expenses
from investments in portfolio securities; all costs and expenses associated with
the registration of the Company under, and compliance with, any applicable
federal or state laws; attorneys' fees and disbursements associated with
updating the Company's registration statement, offering memorandum and other
offering related documents; Board compensation; the costs and expenses of
holding meetings of the Board and any meetings of Interestholders of the
Company, including legal costs associated with the preparation and filing of
proxy materials; the fees and disbursements of the Company's counsel, legal
counsel to the Company, legal counsel to the Board Managers who are not
"interested persons" (as that term is defined in the 0000 Xxx) of the Company or
the Adviser ("Independent Managers"), independent accounts for the Company and
other consultants and professionals engaged on behalf of the Company;
accounting and auditing expenses; the management and services fees paid by the
Company to the Adviser; the fees payable to various service providers including,
but not limited to, Company's administrator, custodian and auditors pursuant to
the Company's agreements with those providers; the costs of a fidelity bond and
any liability insurance obtained on behalf of the Company, the Board, its
officers, or the Adviser; all costs and expense of preparing, setting in type,
printing and distributing reports and other communications to the
Interestholders of the Company; all expenses of computing the Company's net
asset value, including any equipment or services obtained for these purposes;
all charges for equipment or services used in communicating information
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regarding the Company's transactions among the Adviser and any custodian or
other agent engaged by the Company; any extraordinary expenses it may incur,
including any litigation expenses, subject to Board approval; and such other
types of expenses as may be approved from time to time by the Board.
4. COMPENSATION.
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(a) Management Fee.
For the services and facilities to be provided by the Adviser as provided in
Paragraphs 2 and 3(a) hereof, the Company shall pay to the Adviser a fee
computed at the annual rate of 1.5% of the aggregate value of its outstanding
Interests determined as of the last day of each month and payable each calendar
quarter before any repurchases of Interests. The management fee shall be paid
promptly after the end of each such quarter.
(b) Proration.
In the event this Agreement is terminated as of a date other than the last
day of any quarter, the Company shall pay the Adviser a pro rata portion of the
amount that the Company would have been required to pay, if any, had this
Agreement remained in effect for the full quarter.
5. COMPANY TRANSACTIONS.
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In connection with the management of the investment and reinvestment of the
assets of the Company, the Adviser is authorized to select broker-dealers that
will execute purchase and sale transactions for the Company and is directed to
use its best efforts to seek the best overall terms available. In assessing the
best overall terms available for any transaction, the Adviser shall consider all
factors it deems relevant, including the breadth of the market and the price of
the security, the financial condition and execution capability of the broker-
dealer, and the reasonableness of the terms and conditions, if any, with respect
to the Company's investment.
6. OWNERSHIP OF RECORDS.
---------------------
All records required to be maintained and preserved by the Company pursuant
to the provisions of rules or regulations of the SEC under Section 31(a) of the
1940 Act and maintained and preserved by the Adviser on behalf of the Company
are the property of the Company and will be surrendered by the Adviser promptly
upon request by the Company.
7. RELATIONS WITH THE COMPANY.
---------------------------
Subject to, and in accordance with, the Limited Liability Company Agreement
("LLC Agreement") of the Company, it is understood that the Board Managers,
Interestholders and agents of the Company are or may be interested in the
Adviser (or any successor thereof) as managers, Interestholders or otherwise,
that managers, Interestholders or agents of the Adviser are or may be interested
in the Company as Board managers or Interestholders or otherwise, that the
Adviser (or any such successor) is or may be interested in the Company as an
Interestholder or otherwise and that the effect of any such Interests shall be
governed by the LLC Agreement.
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8. LIABILITY OF THE ADVISER.
-------------------------
In the absence of (a) willful misfeasance, bad faith or gross negligence on
the part of the Adviser in performance of its obligations and duties hereunder,
(b) reckless disregard by the Adviser of its obligations and duties hereunder,
or (c) a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services (in which case any award of damages shall
be limited to the period and the amount set forth in Section 36(b)(3) of the
1940 Act), the Adviser shall not be subject to any liability whatsoever to the
Company, or to any Member for any error of judgment, mistake of law or any other
act or omission in the course of, or connected with, rendering services
hereunder including, without limitation, for any losses that may be sustained in
connection with the purchase, holding, redemption or sale of any security on
behalf of the Company.
9. INDEMNIFICATION.
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(a) To the fullest extent permitted by law, the Company shall, subject to
Section 9(c) of this Agreement, indemnify the Adviser (including for this
purpose each officer, director, partner, principal, employee or agent of, or any
person who controls, is controlled by or is under common control with, the
Adviser, and their respective executors, heirs, assigns, successors or other
legal representatives) (each such person being referred to as an "indemnitee")
against all losses, claims, damages, liabilities, costs and expenses arising by
reason of being or having been Adviser to the Company, or the past or present
performance of services to the Company in accordance with this Agreement by the
indemnitee, except to the extent that the loss, claim, damage, liability, cost
or expense has been finally determined in a judicial decision on the merits from
which no further appeal may be taken in any action, suit, investigation or other
proceeding to have been incurred or suffered by the indemnitee by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of the indemnitee's office. These losses, claims,
damages, liabilities, costs and expenses include, but are not limited to,
amounts paid in satisfaction of judgments, in compromise, or as fines or
penalties, and counsel fees and expenses, incurred in connection with the
defense or disposition of any action, suit, investigation or other proceeding,
whether civil or criminal, before any judicial, arbitral, administrative or
legislative body, in which the indemnitee may be or may have been involved as a
party or otherwise, or with which such indemnitee may be or may have been
threatened, while in office or thereafter. The rights of indemnification
provided under this Section 9 are not to be construed so as to provide for
indemnification of an indemnitee for any liability (including liability under
U.S. federal securities laws which, under certain circumstances, impose
liability even on persons that act in good faith) to the extent (but only to the
extent) that indemnification would be in violation of applicable law, but shall
be construed so as to effectuate the applicable provisions of this Section 9.
(b) Expenses, including counsel fees and expenses, incurred by any
indemnitee (but excluding amounts paid in satisfaction of judgments, in
compromise, or as fines or penalties) may be paid from time to time by the
Company in advance of the final disposition of any action, suit, investigation
or other proceeding upon receipt of an undertaking by or on behalf of the
indemnitee to repay to the Company amounts paid if a determination is made that
indemnification of the expenses is not authorized under Section 9(a) of this
Agreement, so long as (i) the indemnitee provides security for the undertaking,
(ii) the Company is insured by or on behalf of the indemnitee against losses
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arising by reason of the indemnitee's failure to fulfill his, her or its
undertaking, or (iii) a majority of the Independent Managers of the Company
(excluding any Manager who is or has been a party to any other action, suit,
investigation or other proceeding involving claims similar to those involved in
the action, suit, investigation or proceeding giving rise to a claim for
advancement of expenses under this Agreement) or independent legal counsel in a
written opinion determines based on a review of readily available facts (as
opposed to a full trial-type inquiry) that reason exists to believe that the
indemnitee ultimately shall be entitled to indemnification.
(c) As to the disposition of any action, suit, investigation or other
proceeding (whether by a compromise payment, pursuant to a consent decree or
otherwise) without an adjudication or a decision on the merits by a court, or by
any other body before which the proceeding has been brought, that an indemnitee
is liable to the Company or its Members by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of the indemnitee's office, indemnification shall be provided in
accordance with Section 9(a) of this Agreement if (i) approved as in the best
interests of the Company by a majority of the Independent Managers (excluding
any Manager who is or has been a party to any other action, suit, investigation
or other proceeding involving claims similar to those involved in the action,
suit, investigation or proceeding giving rise to a claim for indemnification
under this Agreement) upon a determination based upon a review of readily
available facts (as opposed to a full trial-type inquiry) that the indemnitee
acted in good faith and in the reasonable belief that the actions were in the
best interests of the Company and that the indemnitee is not liable to the
Company or its Members by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of the
indemnitee's office, or (ii) the Managers secure a written opinion of
independent legal counsel based upon a review of readily available facts (as
opposed to a full trial-type inquiry) to the effect that indemnification would
not protect the indemnitee against any liability to the Company or its Members
to which the indemnitee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of the indemnitee's office.
(d) Any indemnification or advancement of expenses made in accordance with
this Section 9 shall not prevent the recovery from any indemnitee of any amount
if the indemnitee subsequently is determined in a final judicial decision on the
merits in any action, suit, investigation or proceeding involving the liability
or expense that gave rise to the indemnification or advancement of expenses to
be liable to the Company or its Members by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of the indemnitee's office. In any suit brought by an indemnitee to
enforce a right to indemnification under this Section 9 it shall be a defense
that, and in any suit in the name of the Company to recover any indemnification
or advancement of expenses made in accordance with this Section 9 the Company
shall be entitled to recover the expenses upon a final adjudication from which
no further right of appeal may be taken that, the indemnitee has not met the
applicable standard of conduct described in this Section 9. In any suit brought
to enforce a right to indemnification or to recover any indemnification or
advancement of expenses made in accordance with this Section 9, the burden of
proving that the indemnitee is not entitled to be indemnified, or to any
indemnification or advancement of expenses, under this Section 9 shall be on the
Company (or on any Member acting derivatively or otherwise on behalf of the
Company or its Members).
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(e) An indemnitee may not satisfy any right of indemnification or
advancement of expenses granted in this Section 9 or to which he, she or it may
otherwise be entitled except out of the assets of the Company, and no Member
shall be personally liable with respect to any such claim for indemnification or
advancement of expenses.
(f) The rights of indemnification provided in this Section 9 shall not be
exclusive of or affect any other rights to which any person may be entitled by
contract or otherwise under law. Nothing contained in this Section 9 shall
affect the power of the Company to purchase and maintain liability insurance on
behalf of the Adviser or any indemnitee.
10. DURATION AND TERMINATION OF THIS AGREEMENT.
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(a) Duration.
This Agreement shall be executed and become effective on the first date upon
which the Agreement shall have been approved by a majority of the outstanding
voting interest as the term is defined in the 0000 Xxx) of the Company. Unless
terminated as herein provided, this Agreement shall remain in full force and
effect through August 23, 2008 and shall continue in full force and effect for
periods of one year thereafter so long as such continuance is approved at least
annually by either, the Board, including a majority of the Independent Managers
(who are not a party to this) cast in person at a meeting called for the purpose
of voting on such approval or by a vote of a majority of the outstanding voting
interests (as defined in the 0000 Xxx) of the Company.
Any approval of this Agreement by the holders of a majority of the
outstanding interests (as defined in the 0000 Xxx) of the Company shall be
effective to continue this Agreement notwithstanding (a) that this Agreement has
not been approved by the holders of a majority of the outstanding interests of
the Company affected thereby, and (b) that this Agreement has not been approved
by the vote of a majority of the outstanding interests of the Company, unless
such approval shall be required by any other applicable law or otherwise.
(b) Termination.
This Agreement may be terminated at any time, without payment of any penalty,
by vote of the Board or by vote of a majority of the outstanding interests (as
defined in the 0000 Xxx) of the Company or by the Adviser, on sixty (60) days'
written notice to the other party.
(c) Automatic Termination.
This Agreement shall automatically terminate in the event of its "assignment"
(as defined in the 1940 Act and rules thereunder) if consent to such assignment
is not obtained in accordance with subsection (d).
(d) Transfer or Assignment
This Agreement may not be transferred, assigned, sold or in any manner
hypothecated or pledged without the affirmative vote or written consent of the
holders of a majority of the outstanding voting interests of the Company or
series (if any).
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11. SERVICES NOT EXCLUSIVE.
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The services of the Adviser to the Company hereunder are not to be deemed
exclusive, and the Adviser shall be free to render similar services to others so
long as its services hereunder are not impaired thereby.
12. USE OF NAMES.
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The Adviser may act as investment adviser for any other person, firm or
corporation and use the name "Marwood" or "Old Field" in connection with other
investment companies, registered or unregistered, for which it or its affiliates
may act as investment adviser or general distributor. If the Adviser shall no
longer act as investment adviser of the Company, the Adviser may withdraw the
right of the Company to use the name "Marwood" and/or "Old Field" as part of its
name, or in any other manner.
13. MISCELLANEOUS.
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(a) Amendment of 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 whom enforcement of the change, waiver, discharge or termination is
sought. No material amendment of this Agreement shall be effective until
approved in the manner required by the 1940 Act and rules thereunder or in
accordance with exemptive or other relief granted by the SEC or its staff.
(b) Severability.
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
(c) Governing Law.
This Agreement shall be construed in accordance with the laws of the State of
New York, without giving effect to the conflicts of laws principles thereof, and
in accordance with the 1940 Act. To the extent that the applicable laws of the
State of New York conflict with the applicable provisions of the 1940 Act, the
latter shall control.
(d) Counterparts.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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(e) Headings.
The captions in this Agreement are included for convenience of reference only
and in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
(f) Entire Agreement.
This Agreement states the entire agreement of the parties hereto, and is
intended to be the complete and exclusive statement of the terms hereof. It may
not be added to or changed orally, and may not be modified or rescinded except
by a writing signed by the parties hereto and in accordance with the 1940 Act.
(g) Notices.
Any notice under this Agreement shall be given in writing and shall be deemed
to have been duly given when delivered by hand, on the date indicated as the
date of receipt on a return receipt, or at a time of receipt if sent to the
other party at the principal office of such party or by regular mail,
commercially delivered.
(h) Liability of the Board of Managers and Interestholders.
Any obligations of the Company under this Agreement are not binding upon the
Board of Managers or the Company's Interestholders individually but are binding
only upon the assets and property of the Company. The Adviser represents that it
has notice of the provisions of the Limited Liability Company Agreement of the
Company disclaiming Member and Manager liability for acts and obligations of the
Company.
(i) Form ADV; Company Changes.
The Company acknowledges receiving Part II of the Adviser's Form ADV. The
Adviser covenants that it will notify the Company of any changes in the
membership of its officers within a reasonable time after such change.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
Old Field Master Fund, LLC
By: /s/ Xxxxxxx Xxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxx
Title: Secretary
Marwood Alternative Asset Management LLC
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: President
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