EXHIBIT G.1
INVESTMENT ADVISORY AGREEMENT
BETWEEN
GENERAL MOTORS INVESTMENT MANAGEMENT CORPORATION
AND
GMAM ABSOLUTE RETURN STRATEGIES FUND, LLC
AGREEMENT made as of this 25th day of November, 2002, by and between
General Motors Investment Management Corporation (the "Adviser") and GMAM
Absolute Return Strategies Fund, LLC, a Delaware Limited Liability Company (the
"Company").
WHEREAS, the Company is registered, or is in the process of
registering, as a closed-end management investment company under the Investment
Company Act of 1940 (the "1940 Act");
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940 ("Advisers Act") and engages in the business of
acting as an investment adviser;
WHEREAS, the Company desires to retain the Adviser to render investment
advisory services and to provide certain administrative services to the
investment portfolios of the Company identified on Schedule A hereto (each a
"Fund"); and
WHEREAS, the Adviser desires to be retained to perform such services
on said terms and conditions;
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, the Company and the Adviser agree as follows:
1. Retention and Management.
(a) The Company hereby retains the Adviser to act as its investment
adviser and, subject to the supervision and control of the Board of Managers of
the Company (the "Board"), to manage the investment activities of the Funds as
hereinafter set forth. Without limiting the generality of the foregoing, the
Adviser shall: obtain and evaluate such information and advice relating to the
economy, securities markets, and securities as it deems necessary or useful to
discharge its duties hereunder; continuously manage the assets of each Fund in a
manner consistent with the investment objective, policies, and restrictions of
that Fund, as set forth in any registration statement for the Company and/or the
Fund and as may be adopted from time to time by the Board, and applicable laws
and regulations; determine the securities to be purchased, retained, sold, or
otherwise disposed of by each Fund and the timing of any purchases, sales, and
dispositions; and take such further action, including the placing of purchase
and sale orders and the voting of securities on behalf of the Company and the
Funds, as the Adviser shall deem necessary or appropriate.
(b) The Adviser shall furnish to, or place at the disposal of, the
Company such of the information, evaluations, analyses, and opinions formulated
by or obtained by the Adviser in the discharge of its duties as the Company may,
from time to time, reasonably request.
(c) The Adviser hereby agrees to provide certain management,
administrative, and other services to the Company and the Funds. Notwithstanding
the appointment of the Adviser to provide such services hereunder, the Board
shall remain responsible for supervising and controlling the management,
business, and affairs of the Company and the Funds.
(d) The Adviser shall develop investment policies and guidelines to
be utilized by it in investing on behalf of the Company and the Funds.
2. Authorization. Without limiting the generality of paragraph 1 hereof,
the Adviser shall be authorized to open, maintain, and close accounts in the
name and on behalf of the Funds with brokers and dealers as it determines are
appropriate; to select and place orders with brokers, dealers, or other
financial intermediaries for the execution, clearance, or settlement of any
transactions on behalf of the Funds on such terms as the Adviser considers
appropriate and that are consistent with the policies of the Funds; and, subject
to any policies adopted by the Board and to the provisions of applicable law, to
agree to such commissions, fees, and other charges on behalf of the Funds as it
shall deem reasonable in the circumstances taking into account all such factors
as it deems relevant (including the quality of research and other services made
available to it even if such services are not for the exclusive benefit of a
particular Fund and the cost of such services does not represent the lowest cost
available) and shall be under no obligation to combine or arrange orders so as
to obtain reduced charges unless otherwise required under the federal securities
laws; to pursue and implement the investment policies and strategies of a Fund
using a multi-manager strategy whereby some or all of the Fund's assets may be
committed from time to time by the Adviser to investment funds managed by third
parties and/or to the discretionary management of one or more subadvisers,
provided that the selection of such subadvisers shall be subject to the approval
of the Board and any conditions imposed by applicable law; and to identify
appropriate investment funds and/or subadvisers and determine the assets to be
committed to each such investment fund and/or subadviser.
3. Personnel. The Adviser shall maintain such staff and employ or retain
such personnel and consult with such other persons as may be necessary to render
the services required to be provided by the Adviser or furnished to the Company
and the Funds under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of the Adviser shall be deemed to include
persons employed or otherwise retained by the Adviser or made available to the
Adviser by its affiliates.
4. Delivery of Documents by the Company. The Company will, from time to
time, furnish or otherwise make available to the Adviser such offering
documents, financial reports, proxy statements, policies and procedures and
other information relating to the business and affairs of the Company and the
Funds as the Adviser may reasonably require in order to discharge its duties and
obligations hereunder.
5. Expenses. The Adviser will bear all of its own costs incurred in
providing services under this Agreement. Each Fund assumes and shall pay or
cause to be paid all expenses of that Fund and a pro rata share of Company
expenses not expressly assumed by the Adviser under this Agreement, including
without limitation:
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(a) all investment related expenses, including, but not limited to, fees
paid directly or indirectly to subadvisers and all costs and expenses
related to portfolio transactions and positions for the Company's
account including without limitation brokerage commissions, research
fees, interest and commitment fees on loans and debit balances,
borrowing charges on securities sold short, dividends on securities
sold short but not yet purchased, margin fees, transfer taxes and
premiums, taxes withheld on foreign dividends and indirect expenses
from investments in investment funds;
(b) all costs and expenses associated with the organization and
registration of the Company to the extent that such expenses are not
borne by the initial member of the Company, certain offering costs and
the costs of compliance with any applicable Federal or state laws;
(c) the costs and expenses of holding meetings of the Board of Managers and
any meetings of members of the Company ("Members");
(d) all costs and expenses associated with tender offers relating to
repurchases of Interests;
(e) any non-investment related interest expenses;
(f) recordkeeping, custody and escrow fees and expenses;
(g) fees and disbursements of any attorneys, accountants, auditors and
other consultants and professionals engaged on behalf of the Company or
the Board of Managers including, without limitation, for purposes of
preparing, updating and reviewing the Company's 1940 Act registration
statement, offering document, and subscription agreement ("Offering
Materials");
(h) the costs of printing the Offering Materials and distributing such
Offering Materials to prospective investors;
(i) the costs of preparing and mailing reports and other communications to
Members;
(j) fees and expenses of administrative service providers and the Fund's
custodian;
(k) the costs of a fidelity bond and any liability insurance obtained on
behalf of the Company or the Board of Managers;
(l) all expenses of computing each Fund's net asset value, including any
equipment or services obtained for these purposes;
(m) all charges for equipment or services used in communicating information
regarding the Company's transactions among the Adviser and the
custodian or any other agent engaged by the Company; and
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(n) such other types of expenses as may be approved from time to time by
the Board of Managers.
6. Adviser's Representations and Warranties. The Adviser represents and
warrants:
(a) that it is duly registered and in good standing with the
Securities and Exchange Commission as an investment adviser under the Advisers
Act and agrees that it shall maintain such registration at all times during the
term of this Agreement.
(b) that it has completed, obtained, or performed all
registrations, filings, approvals, authorizations, consents, and examinations
required by any government or governmental authorities for the performance of
the acts contemplated by this Agreement, and will maintain such status during
the term of this Agreement.
(c) that it shall maintain and enforce a code of conduct for its
employees during the term of this Agreement that complies with the requirements
of rule 17j-1 under the 1940 Act, as it may be amended from time to time, and
agrees to provide the Company with a copy of such code of conduct and any
amendments thereto.
(d) that it has established procedures for voting proxies and shall
deliver voting instructions to the Company's custodian with respect to such
proxies in a timely fashion. The Adviser shall be responsible for obtaining all
proxy materials from the custodian. The Adviser shall retain a record of its
voting instructions with respect to all proxies and shall furnish a copy of its
voting procedures and any changes thereto to the Company within 10 days of any
such change.
7. Books and Records. In compliance with the requirements of rule 31a-3
under the 1940 Act, the Adviser hereby agrees that all records that it maintains
for the Company are the property of the Company and further agrees to surrender
promptly to the Company any of such records upon the Company's request. The
Adviser further agrees to preserve for the periods proscribed by rule 31a-2
under the 1940 Act the records required to be maintained by rule 31a-1 under the
1940 Act.
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8. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, each of the Funds will pay the Adviser, and the
Adviser will accept as full compensation therefor, a quarterly fee equal to the
lesser of (i) the fee at the applicable annual rate set forth on Schedule A
hereto or (ii) such fee as may from time to time be agreed upon in writing by
the Company and the Adviser. If the fee payable to the Adviser pursuant to this
paragraph begins to accrue after the beginning of any quarter or if this
Agreement terminates before the end of any quarter, the fee for the period from
such date to the end of such quarter or from the beginning of such quarter to
the date of termination, as the case may be, shall be prorated according to the
proportion which such period bears to the full quarter in which such
effectiveness or termination occurs. For purposes of calculating fees, the value
of a Fund's net assets shall be computed in the manner specified in the
Company's Registration Statement and the Company's Limited Liability Company
Agreement for the computation of the value of the Company's net assets in
connection with the determination of the net asset value of the Company's
interests. The Adviser may, in its discretion or as required by applicable law,
reimburse or offset the fees incurred by a Member that has a separate advisory
or other fiduciary relationship with the Adviser or its affiliates.
9. Services Not Exclusive. The services of the Adviser to the Company are
not to be deemed exclusive, it being understood that the Adviser performs
investment advisory and management services for various other clients. The
Company agrees that the Adviser may give advice and take action with respect to
any of its other clients that may differ from advice given or from the timing or
nature of actions taken with respect to the Company or any Fund.
10. Delivery of Documents by the Adviser. The Company acknowledges receipt
from the Adviser more than forty-eight (48) hours prior to the execution of this
Agreement of materials relating to the Adviser, including current copies of
Parts I and II of Form ADV under the Advisers Act.
11. Limitation of Liability. The Adviser will not be liable for any error
of judgment or mistake of law or for any loss suffered by the Funds in
connection with the performance of this Agreement, except a loss resulting from
a breach of fiduciary duty under the 1940 Act with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith, or gross negligence on the part of the Adviser in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement. Notwithstanding the foregoing, nothing in this paragraph should be
deemed to be a waiver or limitation of any rights the Company or any Fund may
have under the federal securities laws.
12. Indemnification. To the fullest extent permitted by law, the Company
shall, subject to Section 12(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
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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 12 are not to be
construed so as to provide for indemnification of an indemnitee for any
liability to the extent (but only to the extent) that such indemnification would
be in violation of applicable law, but shall be construed so as to effectuate
the applicable provisions of this Section 12.
(a) 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 12(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
arising by reason of the indemnitee's failure to fulfill his, her or its
undertaking, or (iii) a majority of the Managers (each, a "Manager," and
collectively, the "Managers") of the Company who are not "interested persons"
(as that term is defined in the 0000 Xxx) of the Company ("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 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.
(b) 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 Managers 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 12(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
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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 Managers 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 Managers
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.
(c) Any indemnification or advancement of expenses made in
accordance with this Section 12 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 Managers 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 12 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 12 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 12. 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 12, the burden of proving that the indemnitee is not entitled to be
indemnified, or to any indemnification or advancement of expenses, under this
Section 12 shall be on the Company (or on any Manager acting derivatively or
otherwise on behalf of the Company or its Managers).
(d) An indemnitee may not satisfy any right of indemnification or
advancement of expenses granted in this Section 12 or to which he, she or it may
otherwise be entitled except out of the assets of the Company, and no Manager
shall be personally liable with respect to any such claim for indemnification or
advancement of expenses.
(e) The rights of indemnification provided in this Section 12 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
12 shall affect the power of the Company to purchase and maintain liability
insurance on behalf of the Adviser or any indemnitee.
13. Duration and Termination. This Agreement shall become effective as of
the date first noted above, shall remain in effect for an initial term expiring
two years thereafter, and shall continue in effect from year to year thereafter
provided such continuance is approved at least annually in a manner consistent
with the provisions of Section 15 of the 1940 Act. The Company may at any time,
without payment of any penalty, terminate this
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Agreement upon sixty days' prior written notice to the Adviser, either by
majority vote of the Board or by the vote of a majority of the outstanding
voting securities (as defined in the 0000 Xxx) of the Company. The Adviser may
at any time, without payment of penalty, terminate this Agreement upon sixty
days' prior written notice to the Company. This Agreement shall automatically
terminate in the event of its assignment (to the extent required by the 1940 Act
and the rules thereunder) unless such automatic termination shall be prevented
by an exemptive order of the Securities and Exchange Commission.
14. Notice. Any notice under this Agreement shall be given in writing and
shall be deemed to have been duly given when delivered by hand or facsimile or
five days after mailed by certified mail, post-paid, by return receipt requested
to the other party at the principal office of such party.
15. Amendment of this Agreement. This Agreement may be amended only by the
written agreement of the Company and the Adviser. Any amendment shall be
required to be approved by the Board, in a manner consistent with the provisions
of applicable law.
16. Controlling Law. This Agreement shall be construed in accordance with
the internal law (and not the law of conflicts) of the State of New York.
17. Board Approval. The Company represents that this Agreement has been
duly approved by the Board, including a majority of the Board members who are
not "interested persons" of the Company, as that term is defined in the 1940
Act.
18. Parties to this Agreement. The parties to this Agreement agree that the
obligations of the Company and the Funds under this Agreement shall not be
binding upon any of the Managers, members of the Company or any officers,
employees or agents, whether past, present or future, of the Company,
individually, but are binding only upon the assets and property of the Company
and the Funds.
19. Miscellaneous.
(a) The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
(b) 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 executed and delivered this
Agreement on the day and year first above written.
Attest: GMAM Absolute Return Strategies Fund, LLC
By: /s/ W. Xxxxx Xxxx
---------------------
Name: W. Xxxxx Xxxx
Title: President
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Attest: General Motors Investment Management Corporation
By: /s/ W. Xxxxx Xxxx
----------------------------
Name: W. Xxxxx Xxxx
Title: President and Chief Executive Officer
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SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
GENERAL MOTORS INVESTMENT MANAGEMENT CORPORATION
AND
GMAM ABSOLUTE RETURN STRATEGIES FUND, LLC
DATED NOVEMBER 25, 2002
Name of Fund Compensation*
GMAM Absolute Return Strategy Fund I Annual rate of one percent
(1.00%) of the net assets of
the Fund.
Attest: GMAM Absolute Return Strategies Fund, LLC
By: /s/ W. Xxxxx Xxxx
---------------------------
Name: W. Xxxxx Xxxx
Title: President
Attest: General Motors Investment Management Corporation
By: /s/ W. Xxxxx Xxxx
---------------------------
Name: W. Xxxxx Xxxx
Title: President and Chief Executive Officer
----------
* All fees are paid quarterly.
