Exhibit (g)(1)
MANAGEMENT AGREEMENT
AGREEMENT made this 9th day of February, 1998, by and between THE
PACIFIC CORPORATE GROUP PRIVATE EQUITY FUND, a Delaware business trust
(hereinafter referred to as the "Fund"), and PACIFIC CORPORATE GROUP, INC., a
California corporation (hereinafter referred to as the "Management Company").
WITNESSETH:
WHEREAS, the Fund proposes to engage in business as a closed-end
management investment company registered under the Investment Company Act of
1940, as amended (the "Investment Company Act"); and
WHEREAS, the Management Company is engaged principally in rendering
management and investment advisory services and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Fund desires to retain the Management Company to provide
management and investment advisory services to the Fund in the manner and on the
terms hereinafter set forth; and
WHEREAS, the Management Company is willing to provide management and
investment advisory services to the Fund on the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:
ARTICLE I
DUTIES OF THE MANAGEMENT COMPANY
The Fund hereby retains the Management Company to act as the manager of
the Fund and to furnish, or arrange for its affiliates to furnish, the Fund with
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, for the period and on the terms and conditions set forth in this
Agreement. The Management Company hereby accepts such employment and agrees
during such period, at its own expense, to render, or arrange for the rendering
of, such services and to assume the obligations herein set forth for the
compensation provided for herein.
(a) Management Services. The Management Company shall perform the
management services necessary for the operation of the Fund. The Management
Company shall provide the Fund with office space, equipment and facilities and
such other services as the Management Company, subject to review by the Board of
Trustees, shall from time to time determine to be necessary or useful to perform
its obligations under this Agreement. The Management Company shall also, on
behalf of the Fund, conduct relations with custodians, depositories, transfer
agents, 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. The Management Company shall generally
monitor the Fund's compliance with investment policies and restrictions as set
forth in filings made by the Fund under the United States Federal securities
laws. The Management Company shall co-ordinate with any administrator selected
by the Trustees and shall make reports to the Board of Trustees of the
performance of its obligations hereunder and furnish advice and recommendations
with respect to such other aspects of the business and affairs of the Fund as it
shall determine to be desirable. The Management Company and each of its
affiliates shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Fund in any way or otherwise be deemed an
agent of the Fund, except as otherwise provided in the Fund's Declaration of
Trust.
(b) Investment Advisory Services. The Management Company shall
provide, or arrange for its affiliates to provide, the Fund with such investment
research, advice and supervision as the latter may from time to time consider
necessary for the proper supervision of the assets of the Fund. The Management
Company shall act as investment adviser to the Fund and, in such capacity, shall
exercise investment discretion on behalf of the Fund and furnish continuously an
investment program for the Fund and shall determine from time to time which
securities shall be purchased, sold or exchanged and what portion of the assets
of the Fund shall be held in the various securities in which the Fund invests or
in cash, including without limitation, selecting Indirect Investments and Direct
Investments (as such terms are defined in the Confidential Private Placement
Memorandum, as supplemented (the "PPM")) and, prior to the purchase of Indirect
Investments and Direct Investments (as such terms are defined in the PPM),
investing funds in Pre-Portfolio Investments (as such term is defined in the
PPM), subject always to the restrictions of the Declaration of Trust and the
By-Laws of the Fund, as amended from time to time, the provisions of the
Investment Company Act and the Fund's investment objective, investment policies
and investment restrictions. The Management Company shall exercise voting
rights, rights to consent to corporate action and any other rights pertaining to
the Fun s portfolio securities. Should the Trustees at any time, however, make
any definite determination as to investment policy and notify the Management
Company thereof in writing, the Management Company shall be bound by such
determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. The Management
Company shall take, on behalf of the Fund, all actions which it deems necessary
to implement the investment policies determined as provided above, and in
particular to place all orders for the purchase or sale of portfolio securities
for the Fund's account with brokers or dealers selected by it, and to that end,
the Management Company is authorized as the agent of the Fund to give
instructions to the Custodian of the Fund as to deliveries of securities and
payments of cash for the account of the Fund. In connection with the selection
of such brokers and dealers and the placing of such orders with respect to
assets of the Fund, the Management Company is directed at all times to seek to
obtain execution and prices within the policy guidelines determined by the Board
of Trustees and set forth in the PPM. Subject to this requirement and the
provisions of the Investment Company Act, the Securities Exchange Act of 1934,
as amended, and other applicable provisions of law, the Management Company may
select brokers or dealers with which it, or the Fund, is affiliated.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
(a) The Management Company. The Management Company assumes and shall
pay for maintaining the staff and personnel necessary to perform its obligations
under this Agreement and shall, at its own expense, provide the office space,
equipment and facilities which it is obligated to provide under Article I
hereof, and shall pay all compensation of officers and Trustees of the Fund who
are affiliated persons of the Management Company.
(b) The Fund. The Fund assumes and shall pay or cause to be paid all
other expenses of the Fund, including, without limitation: organizational costs,
taxes, expenses for legal and auditing services, costs of printing proxies and
shareholder reports, administrative and custodial expenses, expenses of
portfolio transactions, Securities and Exchange Commission fees, state Blue Sky
filing fees, fees and expenses with respect to borrowing, fees and actual
out-of-pocket expenses of Trustees who are not affiliated persons of the
Management Company, insurance, interest, brokerage costs, litigation and other
extraordinary or non-recurring expenses, mailing and other like expenses
properly payable by the Fund.
ARTICLE III
COMPENSATION OF THE MANAGEMENT COMPANY
For the services provided by the Management Company under this
Agreement, the Fund shall pay the Management Company a management fee (the
"Management Fee") computed at the rate of 1.25% per annum of the total capital
commitments of the Fund less any distributions of capital and realized
investment losses, payable quarterly in advance, computed as of the end of the
prior quarter. If this Agreement becomes effective for any partial period,
compensation for such partial period shall be prorated in a manner consistent
with the calculation of the Management Fee as set forth above. The Management
Fee with respect to capital commitments of shareholders participating in a
closing subsequent to the initial closing of the Fund will accrue from the date
of the Fund's initial closing, and will be payable on the date of the closing in
which such shareholder participates. The Management Fee shall be reduced by 100%
of directors' fees or other remuneration received by the Management Company or
its employees from any portfolio company of the Fund. To the extent such fees or
other remuneration exceed the quarterly management fee, the excess amount will
be credited in full against subsequent payments of such fee.
ARTICLE IV
LIMITATION OF LIABILITY OF THE MANAGEMENT COMPANY
The Management Company shall 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 execution and management of the Fund in which the Management
Company has acted in good faith, except for losses arising from willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of reckless disregard of its obligations and duties hereunder. As used
in this Article IV, the term "Managemen Company" shall include any affiliates of
the Management Company performing services for the Fund contemplated hereby and
directors, officers and employees of the Management Company and such affiliates.
ARTICLE V
ACTIVITIES OF THE MANAGEMENT COMPANY
The services of the Management Company to the Fund are not to be
deemed to be exclusive, the Management Company and any person controlled by or
under common control with the Management Company (for purpose of this Article V
referred to as "affiliates") being free to render services to others. It is
understood that Trustees, officers, employees and shareholders of the Fund are
or may become interested in the Management Company and its affiliates, as
directors, officers, employees and shareholders or otherwise and that directors,
officers, employees and shareholders of the Management Company and its
affiliates are or may become interested in the Fund, as Trustees, officers,
employees and shareholders, and that the Management Company and directors,
officers, employees and shareholders of its affiliates are or may become
interested in the Fund as shareholders or otherwise.
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date first above
written and shall remain in force until November 30, 1999 and will continue in
effect thereafter so long as such continuance specifically is approved at least
annually by (i) the Board of Trustees of the Fund, or by the vote of a majority
of the outstanding voting securities of the Fund, and (ii) a majority of those
Trustees 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
approval.
This Agreement may be terminated at any time, without the payment of
any penalty, by the Board of Trustees or by the vote of a majority of the
outstanding voting securities of the Fund, or by the Management Company, on
sixty days' written notice to the other party. This Agreement shall
automatically terminate in the event of its assignment.
ARTICLE VII
AMENDMENTS OF THIS AGREEMENT
This Agreement may be amended by the parties only if such amendment
specifically is approved by (i) the vote of a majority of outstanding voting
securities of the Fund, and (ii) a majority of those Trustees 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 approval.
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
The terms "vote of a majority of the outstanding voting securities,"
"assignment," "affiliated person" and "interested person," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the rules and regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
ARTICLE IX
GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
laws of the State of California and the applicable provisions of the Investment
Company Act. To the extent that the applicable laws of the State of California,
or any of the provisions herein, conflict with the applicable provisions of the
Investment Company Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
THE PACIFIC CORPORATE GROUP
PRIVATE EQUITY FUND
By:____________________________
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
PACIFIC CORPORATE GROUP, INC.
By:____________________________
Name: Xxxxxxxxxxx X. Xxxxx
Title: President
