MANAGEMENT AGREEMENT BY AND BETWEEN STRATEGIC WEALTH & INCOME FUND, LLC AND SWI MANAGEMENT, LLC
Exhibit
10.3
BY
AND BETWEEN
STRATEGIC
WEALTH & INCOME FUND, LLC
AND
SWI
MANAGEMENT, LLC
TABLE OF
CONTENTS
|
Page
|
||
|
ARTICLE
1.
|
DEFINITIONS
|
1
|
|
|
||
|
ARTICLE
2.
|
APPOINTMENT
|
3
|
|
ARTICLE
3.
|
DUTIES
OF THE MANAGER
|
3
|
|
3.1.
Organizational and Offering Services
|
3
|
|
|
3.2.
Acquisition Services
|
3
|
|
|
3.3.
Asset Management Services
|
4
|
|
|
3.4.
Member and Senior Noteholder Services
|
5
|
|
|
3.5.
Other Services
|
6
|
|
|
ARTICLE
4.
|
AUTHORITY
OF MANAGER
|
6
|
|
4.1.
General
|
6
|
|
|
4.2.
Powers of the Manager
|
6
|
|
|
ARTICLE
5.
|
BANK
ACCOUNTS
|
6
|
|
ARTICLE
6.
|
RECORDS
AND FINANCIAL STATEMENTS
|
6
|
|
ARTICLE
7.
|
LIMITATION
ON ACTIVITIES
|
6
|
|
ARTICLE
8.
|
FEES
|
7
|
|
8.1.
Organization Fee
|
7
|
|
|
8.2.
Origination Fees
|
7
|
|
|
8.3.
Acquisition Fees
|
7
|
|
|
8.4.
Asset Management Fees
|
7
|
|
|
ARTICLE
9.
|
EXPENSES
|
7
|
|
|
9.1.
General
|
7
|
|
9.2.
Timing
of and Limitations on Reimbursements
|
8
|
|
| ARTICLE 10. |
VOTING
AGREEMENT
|
8
|
|
ARTICLE
11.
|
RELATIONSHIP
OF MANAGER AND COMPANY; OTHER ACTIVITIES OF THE MANAGER
|
9
|
|
11.1.
Relationship
|
9
|
|
|
11.2.
Time
Commitment
|
9
|
|
|
11.3.
Investment Opportunities and Allocation
|
9
|
|
|
ARTICLE
12.
|
TERM
AND TERMINATION OF THE AGREEMENT
|
9
|
|
12.1.
Term
|
9
|
|
|
12.2.
Termination by
Either Party
|
9
|
|
|
12.3.
Payments on
Termination and Survival of Certain Rights and
Obligations
|
9
|
TABLE
OF CONTENTS
(continued)
|
Page
|
|||
|
ARTICLE
13.
|
ASSIGNMENT |
10
|
|
|
ARTICLE
14.
|
INDEMNIFICATION AND LIMITATION OF LIABILITY |
10
|
|
|
ARTICLE
15.
|
MISCELLANEOUS |
10
|
|
| 15.1. Notices |
10
|
||
| 15.2. Modification |
11
|
||
| 15.3. Severability |
11
|
||
| 15.4. Construction |
11
|
||
| 15.5. Entire Agreement |
11
|
||
| 15.6. Waiver |
11
|
||
| 15.7. Gender |
11
|
||
| 15.8. Titles Not to Affect Interpretation |
11
|
||
| 15.9. Counterparts |
11
|
||
This
Management Agreement, effective as of January 1, 2009 (the “Agreement”), is by and between Strategic Wealth
& Income Fund, LLC, a Delaware limited liability company (the “Company”), and SWI Management, LLC, an Arizona limited
liability company (the “Manager”).
RECITALS
WHEREAS, the Company desires
to avail itself of the knowledge, experience, sources of information, advice,
assistance, and certain facilities available to the Manager, and to have the
Manager undertake the duties and responsibilities hereinafter set forth, all as
provided herein; and
WHEREAS, the Manager is
willing to undertake to render such services on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in
consideration of the foregoing and of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE
1.
DEFINITIONS
The
following defined terms used in this Agreement shall have the meanings specified
below:
“Acquisition Expenses” means
any and all expenses, excluding the Origination Fees and Acquisition Fees,
incurred by the Company, the Manager, or any Affiliate of either in connection
with the selection, acquisition, or development of any property, loan, or other
potential investment, whether or not acquired or originated, as applicable,
including, without limitation, legal fees and expenses, travel and
communications expenses, costs of appraisals, nonrefundable option payments on
properties or other investments not acquired, accounting fees and expenses, and
title insurance premiums.
“Acquisition Fees” shall have
the meaning set forth in Section
8.3.
“Advisory Committed” means
that certain committee established pursuant to Section 6.13 of the Operating
Agreement.
“Affiliate” or “Affiliated” means with
respect to any Person (i) each Person that such Person Controls, (ii) each
Person that Controls such Person, and (iii) each Person that is under common
Control with such Person.
“Asset Management Fee” shall have the meaning set
forth in Section
8.4.
“Capital Contribution” means a capital contribution of a
Member to the Company, made in accordance with the Company’s Operating
Agreement and pursuant to the Memorandum.
“Certificate” means the certificate of formation
of the Company, as amended from time to time.
“Code” means the United States Internal Revenue
Code of 1986, as amended from time to time. All references herein to sections of
the Code shall include any corresponding provision or provisions of succeeding
law.
“Company” means Strategic Wealth & Income
Fund, LLC, a Delaware limited liability company.
“Control” means, with respect
to any Person, the possession, directly or indirectly, through one or more
intermediaries, of the following: (a) in the case of a corporation, ownership of
fifty percent (50%) or more of the outstanding shares of any series or class of
voting securities thereof; (b) in the case of a limited liability company,
partnership, limited partnership or joint venture, the right to receive fifty
percent (50%) or more of the distributions therefrom at any time during the
duration of such Person (including liquidation distributions); (c) in the case
of a trust or estate, ownership of fifty percent (50%) or more of the beneficial
interest therein; (d) in the case of any other Person, ownership of fifty
percent (50%) or more of the economic or beneficial interest therein; or (e) in
the case of any Person, the power or authority, through ownership of voting
securities, by contract or otherwise, to direct the management activities or
policies of such Person.
1
“Distributions” means any
distributions of money or other property by the Company to Members, including
distributions that may constitute a return of capital for federal income tax
purposes.
“Eligible Investments” means any Property, Loans,
and other Permitted Investments.
“GAAP” means accounting principles generally
accepted in the United States in effect from time to time as applied on a
consistent basis.
“IMH Group” means Investors
Mortgage Holdings, Inc.; Investor Mortgage Holdings California, Inc.; IMH
Holdings, LLC; IMH Management Services, LLC; the Manager and any of their
respective Affiliates.
“Investment Committee” means
that certain committee established pursuant to Section 6.12 of the Operating
Agreement.
“Joint Venture” means any joint venture,
limited liability company, or other Affiliate of the Company that owns, in whole
or in part, on behalf of the Company any Properties, Loans, or other Permitted
Investments.
“Liquidation Phase” means the
period commencing on January 1, 2013 and ending concurrently with the expiration
of the term of the Company as set forth in the Operating Agreement.
“Loans” means mortgage loans and other types of
debt financing purchased by the Company.
“Manager” means SWI Management, LLC, an Arizona
limited liability company, or any successor manager to the Company.
“Member” means a Person admitted as a Member of
the Company.
“Memorandum” means that certain Confidential
Private Placement Memorandum, dated January 1, 2009, if and as updated from time
to time, relating to the offer and sale of Units and Senior Notes by the
Company.
“Senior Note
Reinvestment Plan” means the plan
whereby interest payable on the Senior Notes can be loaned to the Company, as
further described in Section 3(c) of the Senior Notes.
“Offering” means the offering of Units and
Senior Notes pursuant to the Memorandum.
“Operating Agreement” means
the limited liability company agreement of the Company, as amended from time
to
time.
“Organization and Offering Expenses”
means those expenses incurred in connection with the Offering by Company
pursuant to the Memorandum and paid or owed to a non-Affiliated third party.
Organization and Offering Expenses include, without limitation, fees paid to
attorneys, brokers, accountants, and any other charges incurred in connection
with the Offering pursuant to the Memorandum.
“Organization Fee” means the fee payable to the Manager
pursuant to Section 8.1.
“Origination Fees” means the fee payable to the Manager
pursuant to Section 8.2.
“Permitted Investments” means all investments (other than
Properties and Loans) that the Company may acquire pursuant to its Certificate,
Operating Agreement, and the investment objectives and policies adopted by the
Investment Committee from time to time, other than short-term investments
acquired for purposes of cash management.
“Person” means a corporation,
limited liability company, partnership, limited partnership, public or private
pension fund, insurance company, foundation, endowment, investment company,
trust, estate, governmental entity, or other entity or natural
person.
“Property” means individually, and “Properties” means
collectively, any real property transferred or conveyed to the Company or a
Subsidiary, either directly or indirectly, including through ownership interests
in a Joint Venture or otherwise.
“Property Manager” means an
entity that has been retained to perform and carry out at one or more of the
Properties property-management services, excluding persons, entities, or
independent contractors retained or hired to perform
facility management or other services or tasks at a particular Property, the
costs for which are passed through to and ultimately paid by the tenant at such
Property.
2
“Redemption and Prepayment Program”
means that program pursuant to which Members and Senior Noteholders can
request that the Company redeem their Units or Senior Notes, as applicable, as
further described in Section 3.7 of Operating Agreement (with respect to Units)
and Section 7 of the Senior Notes (with respect to Senior Notes).
“Senior Note Reinvestment
Plan” means that certain plan
described in Section 3(c) of the Senior Note.
“Senior Noteholders” means the holders of the
Company’s
Senior Notes.
“Senior Notes” means the Company’s 9% senior notes
that are being offered pursuant to the Offering.
“Subsidiary” means, with respect to any Person,
any corporation, limited liability company, trust, partnership or joint venture,
or other entity which is Controlled by such Person or of which a majority of (i)
the total voting power of the voting equity securities or (ii) the outstanding
equity interests is owned, directly or indirectly, by such Person.
“Termination Date” means the
date of termination of the Agreement determined in accordance with Article 12
hereof.
“Units” means limited liability company units
of the Company.
“Unit Reinvestment Plain”
means that certain plan described in Section 3.8 of the Company’s
Operating Agreement.
ARTICLE 2.
APPOINTMENT
The
Company hereby appoints the Manager to serve as its manager on the terms and
conditions set forth in this Agreement, and the Manager hereby accepts such
appointment.
ARTICLE
3.
DUTIES
OF THE MANAGER
The
Manager is responsible for managing, operating, directing, and supervising the
operations and administration of the Company and its assets. Subject to the
limitations set forth in this Agreement, the Manager shall, either directly or
by engaging an Affiliate or third party, perform the following
duties:
3.1. Organizational
and Offering Services. The Manager shall
perform all services related to the organization of the Company or any Offering
or private sale of the Company’s securities, other than services that (a) the
Company elects to perform directly, or (b) would require the Manager to register
as a broker-dealer or investment adviser with the Securities and Exchange
Commission or any state.
3.2. Acquisition
Services.
(a) Serve
as the Company’s investment and financial advisor and provide relevant market
research and economic and statistical data in connection with the Company's
assets and investment objectives and policies;
(b)
Subject to the investment objectives and policies of the Company: (i) locate,
analyze, and select potential investments; (ii) structure and negotiate the
terms and conditions of transactions pursuant to which investments in
Properties, Loans, and other Permitted Investments will be made; (iii) acquire
Properties, Loans, and other Permitted Investments on behalf of the Company;
(iv) arrange for financing and refinancing and make other changes in the asset
or capital structure of investments in Properties, Loans, and other Permitted
Investments; and (v) enter into leases, service contracts, and other agreements
for Properties;
3
(c) Perform
due diligence on prospective investments and create due diligence reports
summarizing the results of such work;
(d)
Prepare reports regarding prospective investments that include recommendations
and supporting documentation necessary for the Investment Committee or Advisory
Committee, if applicable, to evaluate the proposed investments;
(e) Obtain
reports (which may be prepared by the Manager or its Affiliates), where
appropriate, concerning the value of contemplated investments of the
Company;
(f) Deliver
to or maintain on behalf of the Company copies of all appraisals obtained in
connection with the Company's investments; and
(g) Negotiate
and execute approved investments and other transactions.
3.3. Asset
Management
Services.
(a) Real
Estate and Loan Services.
(i)
Investigate, select and, on behalf of the Company, engage and conduct business
with (including enter contracts with) such Persons as the Manager deems
necessary to the proper performance of its obligations as set forth in this
Agreement, including but not limited to consultants, accountants, lenders,
technical advisors, attorneys, brokers, underwriters, corporate fiduciaries,
escrow agents, depositaries, custodians, agents for collection, insurers,
insurance agents, developers, construction companies, Property Managers, and any
and all Persons acting in any other capacity deemed by the Manager necessary or
desirable for the performance of any of the foregoing services;
(ii)
Service and administer any Loans, or enter into one or more agreements with such
Persons as the Manager deems necessary to service and administer any
Loans;
(iii)
Monitor applicable markets and obtain reports (which may be prepared by the
Manager or its Affiliates), where appropriate, concerning the value of
investments of the Company;
(iv)
Monitor and evaluate the performance of each asset of the Company and the
Company's overall portfolio of assets, provide daily management services to the
Company, and perform and supervise the various management and operational
functions related to the Company's investments;
(v)
Formulate and oversee the implementation of strategies for the administration,
promotion, management, operation, maintenance, improvement, financing and
refinancing, marketing, leasing, and disposition of Properties, Loans, and other
Permitted Investments on an overall portfolio basis;
(vi)
Oversee the performance by the Property Managers, if any, of their duties,
including collection and proper deposits of rental payments and payment of
Property expenses and maintenance;
(vii)
Conduct periodic on-site property visits to some or all (as the Manager deems
reasonably necessary) of the Properties to inspect the physical condition of the
Properties and to evaluate the performance of the Property
Managers;
(viii)
Review, analyze, and comment upon the operating budgets, capital budgets, and
leasing plans prepared and submitted by each Property Manager and aggregate
these property budgets into the Company's overall budget;
(ix)
Coordinate and manage relationships between the Company and any Joint Venture
partners; and
(x)
Negotiate and service the Company's debt facilities, if any, and other
financings.
4
(b) Accounting
and Other Administrative Services.
(i)
Provide the day-to-day management of the Company and perform and supervise the
various administrative functions reasonably necessary for the management of the
Company;
(ii) Make
reports to the Advisory Committee each quarter of the investments that have been
made by, with, or involving the Manager or any of its Affiliates and programs
sponsored thereby, including Investors Mortgage Holdings, Inc., IMH Secured Loan
Fund, LLC, and IMH Holdings, LLC;
(iii)
Provide or arrange for any administrative services and items, legal and other
services, office space, office furnishings, personnel, and other overhead items
necessary and incidental to the Company's business and operations;
(iv) Provide
financial and operational planning services;
(v)
Maintain accounting and other record-keeping functions at the Company, including
information concerning the activities of the Company as shall be required to
prepare and to file all periodic financial reports, tax returns and any other
information required to be filed with the Securities and Exchange Commission,
the Internal Revenue Service, and any other regulatory agency;
(vi)
Maintain and preserve all appropriate books and records of the
Company;
(vii) Provide
tax and compliance services and coordinate with appropriate third parties,
including the Company's independent auditors and other consultants, on related
tax matters;
(viii)
Provide the Company with all necessary cash management services;
(ix)
Manage and administer the Company's Unit Reinvestment Plan, Senior Note
Reinvestment Plan, and Redemption and Prepayment Program;
(x)
Evaluate and obtain, on behalf of the Company, adequate insurance coverage based
upon risk management determinations;
(xi)
Monitor the Company's corporate governance structure and adopt and implement
appropriate policies and procedures related thereto;
(xii)
Perform all reporting, record keeping, internal controls, and similar matters in
a manner to allow the Company to comply with applicable law, including the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as appropriate;
(xiii) In
conjunction with the Investment Committee, review all proposed material
transactions before they are completed; and
(xiv) Do
all things necessary to assure its ability to render the services described in
this Agreement.
3.4. Member
and Senior Noteholder Services.
(a) Manage
communications with Members and Senior Noteholders, including answering phone
calls, preparing, and sending written and electronic reports and other
communications;
(b) Establish
technology infrastructure to assist in providing Member and Senior Noteholder
support and service; and
(c) Perform
the various subscription processing services reasonably necessary for the
admission of new Members and acceptance of Senior Note
subscriptions.
5
3.5. Other
Services. Except as provided in
Article 7, the
Manager shall perform any other services reasonably necessary to manage and
operate the Company.
ARTICLE
4.
AUTHORITY
OF MANAGER
4.1.
General. All rights and powers to
manage and control the day-to-day business and affairs of the Company shall be
vested in the Manager. The Manager shall have the power to delegate all or any
part of its rights and powers to manage and control the business and affairs of
the Company to such officers, employees, Affiliates, agents, and representatives
of the Manager or the Company as it may deem appropriate. Any authority
delegated by the Manager to any other Person shall be subject to the limitations
on the rights and powers of the Manager specifically set forth in this
Agreement, the Certificate, or the Operating Agreement.
4.2.
Powers of
the Manager. Subject to the express
limitations set forth in this Agreement, the power to direct the management,
operation, and policies of the Company shall be vested in the Manager, which
shall have the power by itself and shall be authorized and empowered on behalf
and in the name of the Company to carry out any and all of the objectives and
purposes of the Company and to perform all acts and enter into and perform all
contracts and other undertakings that it may in its sole discretion deem
necessary, advisable, or incidental thereto to perform its obligations under
this Agreement.
ARTICLE
5.
BANK
ACCOUNTS
The
Manager may establish and maintain one or more bank accounts in the name of the
Company and may collect and deposit into any such account or accounts, and
disburse from any such account or accounts, any money on behalf of the Company,
provided that no funds shall be commingled with the funds of the Manager. The
Manager shall from time to time render appropriate accountings of such
collections and payments to the Company and the independent auditors of the
Company.
ARTICLE
6.
RECORDS
AND FINANCIAL STATEMENTS
The
Manager, in the conduct of its responsibilities to the Company, shall maintain
adequate and separate books and records for the Company's operations in
accordance with GAAP, which shall be supported by sufficient documentation to
ascertain that such books and records are properly and accurately recorded. Such
books and records shall be the property of the Company and shall be available
for inspection by the Company and by counsel, auditors, and other authorized
agents of the Company, at any time or from time to time during normal business
hours. Such books and records shall include all information necessary to
calculate and audit the fees or reimbursements paid under this Agreement. The
Manager shall utilize procedures to attempt to ensure such control over
accounting and financial transactions as is reasonably required to protect the
Company's assets from theft, error, or fraudulent activity. All financial
statements that the Manager delivers to the Company shall be prepared on an
accrual basis in accordance with GAAP, except for special financial reports that
by their nature require a deviation from GAAP. The Manager shall liaise with the
Company's independent auditors and shall provide such auditors with the reports
and other information that the Company so requests.
ARTICLE 7.
LIMITATION
ON ACTIVITIES
Notwithstanding
any provision in this Agreement to the contrary, the Manager shall not take any
action that, in its sole judgment made in good faith, would (i) subject the
Company to regulation under the Investment Company Act of 1940, as amended, (ii)
violate any law, rule, regulation, or statement of policy of any governmental
body or agency having jurisdiction over the Company, its Units, its Senior
Notes, or its other securities, (iii) require the Manager to register as a
broker-dealer with the Securities and Exchange Commission or any state, or (iv)
violate the Certificate or Operating Agreement.
6
ARTICLE
8.
FEES
8.1.
Organization
Fee. The
Company shall pay the Manager an organization fee in consideration for the
Manager's services in organizing the Company (the “Organization
Fee”). The Organization Fee shall be an
amount equal to one half of one percent (0.5%) of the sum of (i) all Capital
Contributions made to the Company excluding any Capital Contributions made
pursuant to the Unit Reinvestment Plan and (ii) the principal balance of all
Senior Notes excluding any amounts loaned to the Company pursuant to the Senior
Note Reinvestment Plan.. Any Organizational and Offering Expenses incurred in
excess of the Organization Fee shall be borne by the Manager. The Organization
Fee will be paid monthly in arrears, starting with the first month in which the
first sale of Units or Senior Notes occurs, and will be prorated for any partial
month. At each month-end, the Manager shall submit an invoice to the Company,
accompanied by a computation of the Organization Fee for that month, and the
Company shall pay the Organization Fee for that month within five (5) business
days of receipt of the invoice.
8.2.
Origination
Fees. The
Manager and any Affiliate thereof is entitled to charge and retain fees or
commissions, including processing, extension, renewal or modification fees in
connection with the making of Eligible Investments (collectively, “Organization Fees”). In the
event that the Manager or any Affiliate thereof collects Origination Fees, an
amount equal to fifty percent (50%) of such Origination Fees will be credited
against the Asset Management Fee the Company otherwise pays to the Manager. At
each month-end, the Manager shall submit a report to the Company calculating the
Origination Fees received by the Manager or an Affiliate during the course of
the prior month and the amount of such fees that are payable to the
Company.
8.3.
Acquisition
Fees. The
Company will also pay to the Manager an acquisition fee in an amount up to two
percent (2%) of the acquisition price of each Eligible Investment, less any
Origination Fees that are paid to our Manager or any Affiliate with respect to
such Eligible Investments (the “Acquisition
Fee”). The Manager shall submit an invoice to the Company following the
closing or closings of each acquisition of an Eligible Investment, accompanied
by a computation of the Origination Fees and Acquisition Fees relating thereto,
and the Company shall pay the Acquisition Fee, if any, to the Manager within
five (5) business days of receipt of the invoice.
8.4.
Asset
Management Fees. The Company will pay the
Manager a monthly asset management fee (the “Asset Management Fee”) to provide asset management services to
the Company. From January 1, 2009 until commencement of the Liquidation Phase,
the Asset Management Fee is an amount equal to 1.75% of the cost basis of the
aggregate assets of the Company, as determined at each month-end, divided by
twelve. Upon commencement of and continuing until the end of the Liquidation
Phase, the Asset Management Fee is an amount equal to the greater of (i) an
amount equal to 1.75% of the cost basis of the aggregate assets of the Company,
as determined at each month-end, divided by twelve and (ii) an amount equal to
the average Asset Management Fee paid over the preceding twelve months. The
Asset Management Fee will be paid monthly in arrears and will be prorated for
any partial month. At each month-end, the Manager shall submit an invoice to the
Company, accompanied by a computation of the Asset Management Fee for that
month, and the Company shall pay the Asset Management Fee, less any Origination
Fees otherwise payable to the Company pursuant to Section 8.2, for that
month within five (5) business days of receipt of the invoice.
ARTICLE
9.
EXPENSES
9.1.
General. In addition to the
compensation paid to the Manager pursuant to Article 8 hereof,
subject to the limitations set forth in Section 9.2, the
Company shall pay directly or reimburse the Manager for all of the expenses paid
or incurred by the Manager or its Affiliates on behalf of the Company or in
connection with the services provided to the Company pursuant to this Agreement,
including, but not limited to:
(a)
Acquisition Expenses incurred in connection with the selection and acquisition
of Properties, Loans, and other Permitted Investments, including such expenses
incurred related to assets pursued or considered but not ultimately acquired by
the Company;
(b) The
actual out-of-pocket cost of goods and services used by the Company and obtained
from entities not Affiliated with the Manager;
7
(c)
Interest and other costs for borrowed money, including discounts, points, and
other similar fees;
(d) Taxes
and assessments on income or Properties, taxes as an expense of doing business,
and any other taxes otherwise imposed on the Company and its business, assets,
or income;
(e)
Out-of-pocket costs associated with insurance required in connection with the
business of the Company;
(f)
Expenses of managing, improving, developing, operating, and selling Properties
owned by the Company;
(g) All
out-of-pocket expenses in connection with meetings of the Members or
solicitations or tenders relating to the Units or Senior Notes;
(h)
Personnel and related employment costs incurred by the Manager or its Affiliates
in performing the services described in Article 3 hereof,
including but not limited to reasonable salaries and wages, benefits, and
overhead of all employees directly involved in the performance of such services,
provided that no reimbursement shall be made for costs of such employees of the
Manager or its Affiliates to the extent that such employees perform services for
which the Manager receives Origination Fees or Acquisition Fees;
(i)
Out-of-pocket expenses of maintaining communications with Members and Senior
Noteholders, including the cost of preparation, printing, and mailing annual and
other reports, proxy statements, and other reports required by governmental
entities, in each case as applicable;
(j)
Audit, accounting, and legal fees, and other fees for professional services
relating to the operations of the Company, and all such fees incurred at the
request, or on behalf of, the Advisory Committee;
(k)
Out-of-pocket costs for the Company to comply with all applicable laws,
regulations, and ordinances;
(1)
Expenses incurred in connection with making Distributions on behalf of by the
Company to the Members, interest payments on behalf of the Company to the Senior
Noteholders, and expenses incurred in administering the Redemption and
Prepayment Program;
(m)
Expenses of redomesticating, merging, liquidating, or dissolving the Company or
of amending the Certificate or Operating Agreement; and
(n)
All other
out-of-pocket costs incurred by the Manager in performing its duties
hereunder.
9.2.
Timing of
and Limitations on Reimbursements. Expenses incurred by the
Manager on behalf of the Company and reimbursable pursuant to this Article 9 shall be
reimbursed no less than monthly to the Manager. The Manager shall prepare an
expense report documenting the expenses of the Company during each month and
shall deliver such statement to the Company within fifteen (15) days after the
end of each month, and the Company shall reimburse the Manager for such
expenses, to the extent not already reimbursed, within five (5) business days
after receipt of the expense report.
ARTICLE
10.
VOTING
AGREEMENT
The
Manager agrees that, with respect to any Units now or hereinafter owned by it,
the Manager will not vote or consent on matters submitted to the Members
regarding (a) the removal of the Manager or any Affiliate of the Manager or (b)
any transaction between the Company and the Manager or any of its Affiliates.
This voting restriction shall survive until such time that the Manager is both
no longer serving as such and is no longer an Affiliate of the
Company.
8
ARTICLE
11.
RELATIONSHIP
OF MANAGER AND COMPANY;
OTHER
ACTIVITIES OF THE MANAGER
11.1.
Relationship. The Company and the
Manager are not partners or joint venturers with each other, and nothing in this
Agreement shall be construed to make them such partners or joint venturers.
Except as otherwise provided in the Operating Agreement, the Manager may engage
(independently or with others) in other business ventures of every nature and
description, including, without limitation, the rendering of advice or services
of any kind to other investors and the making or management of other investments
and serving as a general partner or manager of other real estate investment
partnerships, companies, or other entities that make, hold, or dispose of real
estate or real estate-related investments. This Agreement shall not limit or
restrict the right of any manager, director, officer, employee, member, or
equityholder of the Manager or its Affiliates to engage in any other business or
to render services of any kind to any other Person. Nothing in this Agreement
shall be deemed to prohibit the Manager or any member of the IMH Group from
dealing or otherwise engaging in business with Persons transacting business with
the Company or from providing services or advice relating to the purchase, sale,
servicing, administering, financing, management, construction, renovation, or
operation of assets of the type included within the definition of Eligible
Investments and receiving compensation therefor. Neither the Company nor any
Member shall have any right by virtue of this Agreement or the relationship
created hereby in or to such other ventures or activities or to the income or
proceeds derived therefrom, and the pursuit of such ventures shall not be deemed
wrongful or improper. The Manager shall promptly disclose to the Advisory
Committee the existence of any condition or circumstance, existing or
anticipated, of which it has knowledge, that creates or could create a conflict
of interest between the Manager's obligations to the Company and its obligations
to or its interest in any other Person. The Company hereby acknowledges the
existence of the actual and potential conflicts of interest described in the
Private Placement Memorandum and, to the fullest extent permitted by law, hereby
waives any claim it may have with respect to the existence of any such conflicts
of interest.
11.2.
Time
Commitment. The Manager shall, and
shall cause its Affiliates and their respective employees, officers, and agents
to, devote to the Company such time as shall be reasonably necessary to conduct
the business and affairs of the Company in an appropriate manner consistent with
the terms of this Agreement. The Company acknowledges that the Manager and its
Affiliates and their respective employees, officers, and agents may also engage
in activities unrelated to the Company and may provide services to Persons other
than the Company or any of its Affiliates.
11.3.
Investment
Opportunities and Allocation. The Manager shall be
required to act in good faith in allocating investment opportunities to the
Company and any Affiliates of the Manager, and to use its best efforts to
provide the Company with a continuing and suitable investment program consistent
with the investment objectives and policies of the Company, as determined and
adopted from time to time by the Investment Committee. Notwithstanding the
foregoing, neither the Manager nor any Affiliate of the Manager shall be
obligated generally to present any particular investment opportunity to the
Company even if the opportunity is of a character that, if presented to the
Company, could be taken by the Company
ARTICLE
12.
TERM
AND TERMINATION OF THE AGREEMENT
12.1.
Term. This Agreement shall
have a term equal to that of the life of the Company, plus whatever amount of
time is necessary to finalize Company operations, including the preparation of
tax and other filings, unless terminated in accordance with Section
12.2.
12.2.
Termination
by Either Party. This Agreement may be
terminated upon 60 days written notice without cause or penalty by either the
Company or the Manager. The provisions of Article 1, Article 10, Article 12, Article 14, and Article 15 shall
survive termination of this Agreement.
12.3. Payments
on Termination and Survival of Certain Rights and
Obligations.
(a) After
the Termination Date, the Manager shall not be entitled to compensation for
further services hereunder, except it shall be entitled to receive from the
Company within 30 days after the effective date of such termination all unpaid
reimbursements of expenses and all earned but unpaid fees payable to the Manager
prior to termination of this Agreement.
9
(b) The
Manager shall promptly upon termination:
(i) pay
over to the Company all money collected pursuant to this Agreement, if any,
after deducting any accrued compensation and reimbursement for its expenses to
which it is then entitled;
(ii)
deliver to the Company a full accounting, including a statement showing all
payments collected by it and a statement of all money held by it;
(iii)
deliver to the Company all assets and documents of the Company then in the
custody of the Manager; and
(iv)
cooperate
with the Company to provide an orderly transition of advisory functions.
ARTICLE 13.
ASSIGNMENT
This
Agreement may be assigned by the Manager to an Affiliate with the consent of the
Advisory Committee. The Manager may assign any rights to receive fees or other
payments under this Agreement without obtaining the approval of the Company or
the Advisory Committee. This Agreement shall not be assigned by the Company
without the consent of the Manager, except in the case of an assignment by the
Company to a corporation or other organization that is a successor to all of the
assets, rights, and obligations of the Company, in which case such successor
organization shall be bound hereunder and by the terms of said assignment in the
same manner as the Company is bound by this Agreement.
ARTICLE
14.
INDEMNIFICATION
AND LIMITATION OF LIABILITY
The
Company shall indemnify, defend, and hold harmless the Manager and its
Affiliates to the extent set forth in the Operating Agreement.
ARTICLE
15.
MISCELLANEOUS
15.1.
Notices. Any notice, report, or
other communication required or permitted to be given hereunder shall be in
writing unless some other method of giving such notice, report, or other
communication is required by the Certificate, Operating Agreement, or is
accepted by the party to whom it is given, and shall be given by being delivered
by hand or by overnight mail or other overnight delivery service to the
addresses set forth herein:
To the
Company:
Strategic
Wealth & Income Fund, LLC
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
To the
Manager:
SWI
Management, LLC
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Either
party may at any time give notice in writing to the other party of a change in
its address for the purposes of this Section
15.1.
10
15.2.
Modification. This Agreement shall not
be changed, modified, terminated, or discharged, in whole or in part, except by
an instrument in writing signed by both parties hereto, or their respective
successors or permitted assigns.
15.3.
Severability. The provisions of this
Agreement are independent of and severable from each other, and no provision
shall be affected or rendered invalid or unenforceable by virtue of the fact
that for any reason any other or others of them may be invalid or unenforceable
in whole or in part.
15.4.
Construction. The provisions of this
Agreement shall be construed and interpreted in accordance with the laws of the
State of Delaware.
15.5.
Entire
Agreement. This Agreement contains
the entire agreement and understanding between the parties hereto with respect
to the subject matter hereof, and supersedes all prior and contemporaneous
agreements, understandings, inducements, and conditions, express or implied,
oral or written, of any nature whatsoever with respect to the subject matter
hereof. The express terms hereof control and supersede any course of performance
and/or usage of the trade inconsistent with any of the terms hereof. This
Agreement may not be modified or amended other than by an agreement in
writing.
15.6.
Waiver. Neither the failure nor
any delay on the part of a party to exercise any right, remedy, power, or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, power, or privilege preclude
any other or further exercise of the same or of any other right, remedy, power,
or privilege, nor shall any waiver of any right, remedy, power, or privilege
with respect to any occurrence be construed as a waiver of such right, remedy,
power, or privilege with respect to any other occurrence. No waiver shall be
effective unless it is in writing and is signed by the party asserted to have
granted such waiver.
15.7.
Gender. Words used herein
regardless of the number and gender specifically used, shall be deemed and
construed to include any other number, singular or plural, and any other gender,
masculine, feminine, or neuter, as the context requires.
15.8.
Titles
Not to Affect Interpretation. The titles of Articles
and Sections contained in this Agreement are for convenience only, and they
neither form a part of this Agreement nor are they to be used in the
construction or interpretation hereof.
15.9.
Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original as against any party whose signature appears thereon, and all of which
shall together constitute one and the same instrument. This Agreement shall
become binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as
the signatories. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile, or by electronic mail in a portable document file (.pdf)
or other similar format, shall be effective as delivery of a manually executed
counterpart of this Agreement.
[Remainder
of page intentionally left
blank]
11
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date first above
written.
|
STRATEGIC WEALTH & INCOME FUND, LLC,
a
Delaware limited liability company
By:
SWI Management, LLC, an Arizona limited liability company
Its: Manager
|
|||
|
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
| Name: | ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||
| Title: | President | ||
|
SWI
MANAGE LENT, LLC,
an Arizona limited liability company
|
|||
|
|
By:
|
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ | |
| Name: | ▇▇▇▇▇ ▇▇▇▇▇▇ | ||
| Title: | CEO | ||
12