INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this _____ day of ______, 2000, by and
between XXXxxxxxx.xxx Opportunity Fund, LLC, a Delaware limited liability
company (the "Fund"), and XXXxxxxxx.xxx Advisors, Inc., a Delaware corporation
(the "Investment Manager").
WHEREAS, the Fund is a closed-end management investment company that
has elected to be regulated as a business development company pursuant to
Section 54 under the Investment Company Act of 1940, as amended (the "1940
Act"), consisting of one portfolio of shares.
WHEREAS, the Fund desires to retain the Investment Manager to render
investment management services to the Fund and the Investment Manager is willing
to render such services.
NOW, THEREFORE, in consideration of mutual covenants herein
contained, the parties hereto agree as follows:
1. Duties of the Investment Manager. The Fund hereby appoints the
Investment Manager to act as investment adviser for the period and on such terms
set forth in this Agreement. The Fund employs the Investment Manager to manage
the investment and reinvestment of the Fund"s assets, to continuously review,
supervise and administer the investment program of the Fund to determine in its
discretion the securities to be purchased or sold and the portion of the Fund"s
assets to be held uninvested, provide the Fund with records concerning the
Investment Manager's activities which the Fund is required to maintain, and to
render regular reports to the Fund"s Managing Members (hereinafter referred to
as the Fund"s "Directors") concerning the Investment Manager's discharge of the
foregoing responsibilities.
The Investment Manager accepts such employment and shall discharge the foregoing
responsibilities subject to the control of the Directors of the Fund, and in
compliance with the objectives, policies and limitations set forth in the Fund"s
prospectus as amended or supplemented from time to time (the "Prospectus"), and
applicable laws and regulations.
2. Portfolio Transactions. The Investment Manager is authorized to select
the brokers or dealers that will execute purchases and sales of portfolio
securities for the Fund, to the extent that brokers or dealers will be used to
execute any such transactions, and are directed to use their best efforts to
obtain the best net results as described in the Fund"s Prospectus from time to
time. The Investment Manager agrees to promptly communicate to the Directors of
the Fund such information relating to transactions as they may reasonably
request. The Investment Manager shall further be authorized to incur investment
banking fees, finders fees and other expenses relating to the acquisition of
securities of portfolio companies and to be reimbursed for such expenses and
fees from assets of the Fund.
3. Compensation of the Investment Manager. For the services to be rendered
by the Investment Manager as provided in Sections 1 and 2 of this Agreement, the
Fund shall pay to the Investment Manager a management fee and incentive fee as
described in the Fund"s current Prospectus.
In the event of termination of this Agreement, the fee provided under this
Section shall be computed on the basis of the period ending on the last business
day on which this Agreement is in effect subject to a pro rata adjustment based
on the number of days elapsed in the current month as a percentage of the total
number of days in such month.
4. Reports. The Fund and the Investment Manager agree to furnish to each
other current Prospectuses, proxy statements, reports to Members (hereinafter
referred to as "Investors"), certified copies of their financial statements, and
such other information with regard to their affairs as each may reasonably
request.
5. Status of Investment Manager. The services of the Investment Manager to
the Fund are not to be deemed exclusive, and the Investment Manager shall be
free to render similar services to others so long as its services to the Fund
are not impaired thereby.
6. Liability of Investment Manager. Except as may otherwise be provided by
law, and in the absence of: (i) willful misfeasance, bad faith or gross
negligence on the part of the Investment Manager in performance of its
obligations and duties hereunder; (ii) reckless disregard by the Investment
Manager of their obligations and duties hereunder; or (iii) 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, as amended), the
Investment Manager shall not be subject to any liability whatsoever to the Fund,
or to any Investor in the Fund, 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 Fund.
The federal and state securities laws impose liability in certain
circumstances on persons who act in good faith. Nothing in this agreement shall
be construed to limit any such liabilities.
7. Permissible Interests. Subject to and in accordance with the Operating
Agreement of the Fund and the Articles of Incorporation of the Investment
Manager, Directors and agents to and Investors in the Fund are or may be
interested in the Investment Manager (or any successor thereof) as officers,
directors or otherwise; officers, agents and directors of the Investment Manager
are or may be interested in the Fund as Directors, officers, Investors or
otherwise; and the Investment Manager (or any successor) are or may be
interested in the Fund as an Investor or otherwise. The effect of any such
interrelationships shall be governed by said Operating Agreement or Articles of
Incorporation and the relevant provisions of the l940 Act. All such interests
shall be fully disclosed between the parties on an ongoing basis and in the
Fund"s Prospectus as required by law.
8. Operating Agreement. The Investment Manager is hereby expressly put on
notice of the limitation of Investor and Director liability as set forth in
Article 13 of the Operating Agreement of the Fund and pursuant to the Delaware
Limited Liability Company Act (the "Act") and agree that the obligations assumed
by the Fund pursuant to this Agreement shall be limited in all cases to the Fund
and its assets, and the Investment Manager shall not seek satisfaction of any
such obligation from the Shareholders or any Shareholder of the Fund. Nor shall
the Investment Manager seek satisfaction of any such obligations from the
Directors or any individual Director.
9. Duration and Termination. This Agreement shall continue for two years
from the date of its execution and thereafter for additional periods of one year
from such date if the Directors of the Fund determine that such an extension is
in the best interest of the Fund, or until dissolution prior thereto pursuant to
the provisions hereto. This Agreement may be terminated by the Fund at any time,
without the payment of any penalty, by vote of a majority of the Directors of
the Fund or by vote of a majority of the outstanding voting securities of the
Fund on 60 days' written notice to the Investment Manager. This Agreement may be
terminated by the Investment Manager at any time, without the payment of any
penalty, upon 60 days' written notice to the Fund. This Agreement will
automatically and immediately terminate in the event of its assignment. Any
notice under this Agreement shall be given in writing, addressed and delivered
or mailed postpaid, to the other parties at any office of such party.
As used in this Section, the term "assignment" shall have the meaning set forth
in the 1940 Act.
10. Amendment of Agreement. This Agreement may only be amended by mutual
consent of the parties hereto, but the consent of the Fund must be obtained (a)
by a vote of a majority of those Directors of the Fund who are not parties to
this Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such amendment, and (b) to the
extent required by the 1940 Act, by vote of a majority of the outstanding voting
securities of the Fund.
11. Governing Law. All questions concerning the validity, meaning and
effect of this Agreement shall be determined in accordance with the laws
(without giving effect to the conflict-of-law principles thereof) of the State
of Delaware applicable to contracts made and to be performed in that state.
12. 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.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of this ____ day of _______, 2000.
XXXxxxxxx.xxx Opportunity Fund, LLC XXXxxxxxx.xxx Advisors, Inc.
By ______________________________ By ___________________________________
Name: Name:
Title: Title:
