Exhibit 10.19
INVESTMENT MANAGEMENT AGREEMENT
This Investment Management Agreement (this “Agreement”) is entered into as of July 25, 2019 but effective only as of the Initial Closing, by and among Melodeon Capital Partners, LP (the “Investment Manager”), Melodeon LBS GP, LLC (the “General Partner”), Melodeon LBS DE Feeder III LP (the “Delaware Feeder”), Melodeon LBS DE Feeder I Holdco LP (the “Delaware Blocked Feeder”), Melodeon LBS Cayman Feeder LP (the “Cayman Blocked Feeder”), Melodeon Arizona LBS Feeder LP (the “Arizona Feeder”), Melodeon LBS Legacy Owners Feeder LP (the “Legacy Owners Feeder”, and collectively with the Delaware Feeder, the Delaware Blocked Feeder, the Cayman Blocked Feeder and the Arizona Feeder, the “Feeder Funds”), Melodeon LBS Holdco LP (“Holdco”) and Legal Business Services, LLC (the “Company”). For purposes of this Agreement, the term “Fund” shall include each of the Feeder Funds and any investment vehicles that they may separately or jointly establish, including Holdco, as the context may require. Capitalized terms used but not defined herein shall have the meanings set forth in the Amended and Restated Limited Partnership Agreement of the Delaware Feeder (as may be amended, restated, supplemented or otherwise modified from time to time in accordance with its terms, including any appendices, schedules and annexes thereto, the “Delaware Feeder Partnership Agreement,” and collectively with the analogous agreements of the other Feeder Funds and Holdco, the “Partnership Agreements”) or, if not defined therein, the Amended and Restated Limited Liability Company Agreement of the Company (as may be further amended, restated, supplemented or otherwise modified from time to time in accordance with its terms, including any appendices, schedules and annexes thereto, the “Company LLC Agreement”).
WHEREAS, Melodeon LBS GP, LLC is the General Partner of each Feeder Fund and Holdco;
WHEREAS, the Delaware Feeder, the Arizona Feeder and the Legacy Owners’ Feeder will invest all or substantially all of their assets directly in the Company Common Units, and the Delaware Blocked Feeder and Cayman Blocked Feeder will invest all or substantially all of their assets in Holdco, which, in turn, is expected to invest all or substantially all of its assets in the Company Common Units;
WHEREAS, the General Partner wishes to appoint the Investment Manager to serve as the discretionary investment manager to the Fund, subject to the direction and supervision of the General Partner, on the terms set forth herein;
WHEREAS, the Company wishes to appoint the Investment Manager to provide certain non-discretionary administrative and other services to the Company in connection with the investment activities of, and managed by the Company, subject to the direction and supervision of the Company, on and subject to the terms set forth herein; and
WHEREAS, the Investment Manager is willing to provide the foregoing services to the Fund and the Company, subject to the direction and supervision of the General Partner and the Company Board, respectively, on and subject to the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.Appointment.
(a) The General Partner on behalf of the Fund hereby appoints the Investment Manager to serve as the investment manager to the Fund to manage the Fund’s investments (the
*“Investments”), *and the General Partner hereby delegates to the Investment Manager certain duties and authority related to the Investments, in each case subject to and in accordance with the terms set forth herein. The Investment Manager hereby agrees to serve as investment manager to the Fund and to make Investments on behalf of the Fund subject to and in accordance with this Agreement and the Partnership Agreements, the policies and investment strategy set forth in the Partnership Agreements, the Confidential Private Placement Memorandum of the Fund and the directions of the General Partner.
(b) Each of the General Partner, on behalf of the Fund, and the Company hereby appoints the Investment Manager to provide administrative and other services to the Fund and the Company, respectively, and each of the General Partner, on behalf of the Fund, and the Company, hereby delegates to the Investment Manager certain duties and authority related to the administration of the Fund and the Company, respectively, in each case subject to and in accordance with the terms set forth herein. The Investment Manager hereby agrees to provide such services to the Fund and the Company subject to and in accordance with this Agreement, the Partnership Agreements, the Company LLC Agreement and the directions of the General Partner and the Company Board, as applicable.
2.Investment Manager’s Rights, Duties and Obligations.
(a) Subject to the overall supervisory authority of the General Partner, the General Partner delegates to the Investment Manager the following rights, duties and obligations in connection with the management of the Fund’s Investments:
(i)Investment Acquisition. The Investment Manager shall perform all acts necessary, advisable or convenient (as determined in its sole discretion), to effectuate Investments in accordance with the Partnership Agreements.
(ii)Disposition. The Investment Manager shall perform all acts necessary to effect the disposition of the Investments subject to and in accordance with the Partnership Agreements.
(iii)Indebtedness. The Investment Manager may assist the Fund in borrowing money and issuing evidence of indebtedness subject to and in accordance with the restrictions set forth in the Partnership Agreements.
(iv)Short-Term Investments of Cash. The Investment Manager shall be responsible for the short-term investment of cash held in reserve by the Fund for operations, the acquisition of Investments or otherwise pending distribution to the Combined Limited Partners, in each case pursuant to and in accordance with the applicable Partnership Agreements. Cash will be invested in Temporary Investments as permitted under the Partnership Agreements.
(b) Subject to the overall supervisory authority of the Company Board, the Company may from time to time seek to delegate (if the Investment Manager in its sole discretion elects to accept such delegation), to the Investment Manager the following rights, duties and obligations in connection with the Company’s management of the Company Investments:
(i)Investments. At the request of the Company Board (if the Investment Manager in its sole discretion elects to accept such delegation), the Investment Manager shall assist the Company with respect to the Company’s management of its Investments (including without limitation so assisting the Company in (i) identifying, investigating, evaluating and selecting Investments that are consistent with the investment objectives
-2-
and strategy of the Company, (ii) negotiating the terms and conditions of the Investments, (iii) perfoiniing all acts necessary to effectuate Investments in accordance with the Company LLC Agreement and (iv) identifying and evaluating opportunities for, and negotiating the terms of, financings and dispositions of Investments), in each case subject to and in accordance with the Company LLC Agreement.
(ii)Indebtedness. At the request of the Company Board (if the Investment Manager in its sole discretion elects to accept such delegation), the Investment Manager may assist the Company in borrowing money and issuing evidence of indebtedness subject to and in accordance with the restrictions set forth in the Company LLC Agreement.
3.Engagement of Affiliates. Subject to and in accordance with the restrictions set forth in the Partnership Agreements and the Company LLC Agreement, the Investment Manager may engage any Affiliate of the Investment Manager for the purpose of providing all or any portion of the services to be provided by the Investment Manager under this Agreement at the expense of the Investment Manager.
4.Engagement of Third Parties. Subject to and in accordance with the restrictions set forth in the Partnership Agreements, the Investment Manager may engage, or cause the Fund directly or indirectly to engage, at the expense of the Fund, the services of unaffiliated custodians transfer agents, accountants, attorneys, administrators, consultants and other service providers to the same extent as the General Partner under the Partnership Agreements.
5.Grant of Authority.
(a) Except as specifically provided for herein and/or unless and until the General Partner delivers to the Investment Manager written notice to the contrary, the authority herein granted to the Investment Manager may be exercised without further notice, consent or approval by the Fund. In the performance of its services to the Fund under this Agreement, the Investment Manager and its authorized Affiliates shall have the power and authority to execute and deliver, on behalf of the Fund, all documents, instruments, certificates and other writings (including, without limitation, all brokerage agreements; service agreements; purchase and sale agreements; partnership, limited liability company and joint venture agreements; options; trust agreements; assignments; consents; easements; pleadings; purchase money notes; mortgages and other similar security documents, and any borrowing request, notice, certificate or other document under or in connection with any credit facility secured by all or a portion of the Aggregate Commitments of the Combined Limited Partners) as the Investment Manager may, in its sole discretion, deem necessary or desirable in exercising its authority under this Agreement in accordance with the Partnership Agreements.
(b) Except as specifically provided for herein and/or unless and until the Company delivers to the Investment Manager written notice to the contrary, the authority herein granted to the Investment Manager may be exercised without further notice, consent or approval by the Company. In the performance of its services to the Company under this Agreement, the Investment Manager and its authorized Affiliates shall have the power and authority to execute and deliver, on behalf of the Company, all documents, instruments, certificates and other writings that are consistent with and in furtherance of the services to be provided by the Investment Manager pursuant to and in accordance with this Agreement, in each case as the Investment Manager may, in its sole discretion, deem necessary or desirable in exercising its authority under this Agreement, subject to and in accordance with the Company LLC Agreement.
(c) Without limiting the foregoing, each of the General Partner and the Company hereby irrevocably constitutes and appoints the Investment Manager and any such authorized Affiliate,
-3-
with full power of substitution, as the true and lawful attorney-in-fact and agent of the Fund or Company, as applicable, to execute, acknowledge, verify, swear to, deliver, record and file, in its or its assignee’s name, place and stead, all such documents, instruments, certificates and other writings, but in each case only as the Investment Manager may, in its sole discretion, deem necessary or desirable in exercising its authority under this Agreement, subject to and in accordance with the Partnership Agreements and the Company LLC Agreement, respectively.
6.Insurance. The Investment Manager shall use its reasonable best efforts to obtain and maintain insurance for the Fund and the Investments in such types and amounts and against such risks as the Investment Manager deems appropriate in accordance with such policies or procedures as may be established by the Fund from time to time.
7.Periodic Reports.
(a) The Investment Manager shall (i) review the financial performance of the Investments at least quarterly, (ii) furnish to the Fund the quarterly and annual reports required to be furnished to the Combined Limited Partners pursuant to Section 12.03 of each Partnership Agreement, and (iii) assist, as required, the General Partner in determining the value and other aspects of the Investments.
(b) Subject to the overall supervisory authority of the Company Board, if the Company seeks to delegate any of the following rights, duties and obligations (and the Investment Manager in its sole discretion elects to accept such delegation), the Investment Manager shall (i) review the financial performance of the Company Investments at least quarterly, (ii) assist the Company with the Company’s obligations to furnish the quarterly and annual reports required to be furnished to the Unitholders pursuant to Section 11.03 of the Company LLC Agreement, and (iii) assist, subject to the LLC Agreement, the Company in determining the value and other aspects of the Investments.
8.Maintenance of Records.
(a) The Investment Manager will maintain the books and records of the Fund in accordance with Section 12.01 of the applicable Partnership Agreement as well as appropriate records with respect to the Investment Manager’s activities under this Agreement. These records shall be open to inspection by the Fund at the principal office of the Investment Manager during normal business hours and copies of these records will be made available to the Fund upon its reasonable request and at the Fund’s expense.
(b) Subject to the overall supervisory authority of the Company Board, if the Company seeks to delegate any of the following rights, duties and obligations (and the Investment Manager in its sole discretion elects to accept such delegation), the Investment Manager will assist the Company with the Company’s obligations to maintain the books and records of the Company in accordance with Section 11.01 of the Company LLC Agreement, and the Investment Manager will maintain appropriate records with respect to the Investment Manager’s activities under this Agreement. These records shall be open to inspection by the Company at the principal office of the Investment Manager during normal business hours and copies of these records will be made available to the Company upon its reasonable request and at the Company’s expense.
-4-
9.Additional Administrative Services.
(a)Subject to the overall supervisory authority of the General Partner, the Investment Manager will provide other administrative services to the Fund, as may be requested by the General Partner pursuant to the Partnership Agreements.
(b)Subject to the overall supervisory authority of the Company Board, if the Company seeks to delegate the performance of any other administrative services to the Company, the Investment Manager shall provide such other administrative services to the Company as may be requested by the Company Board pursuant to the Company LLC Agreement (if the Investment Manager in its sole discretion elects to accept such delegation).
10.Custody of Investments. To the extent consistent with applicable law, the Investment Manager and its Affiliates shall have authority to maintain custody and possession of such of the Fund’s Investments as the Investment Manager deems appropriate in the management of the Fund’s Investments, including custody of any instruments evidencing the ownership of the Investments, such as purchase and sale agreements, options, trust agreements, assignments, easements, pleadings, purchase money notes, mortgages and other similar security documents. Any such Investments shall be held on trust for the Fund. If the Fund has appointed a custodian (the “Custodian”) to hold certain of the Fund’s Investments, the Custodian shall furnish to the Investment Manager and the Fund, and the Investment Manager shall furnish to the Custodian, such reports concerning receipts and disbursements with respect to the Fund’s Investments as the other shall reasonably request.
11.Compensation; Expenses. All payments required under this Section 11 shall be made in U.S. dollars by wire transfer of federal funds to an account designated by the Investment Manager or by checks or similar next day funds payable to the order of the Investment Manager.
(a)Investment Management Fee.
(i) As compensation for the services to be performed under this Agreement and in consideration therefor, the Company shall pay to the Investment Manager an investment management fee (the “Investment Management Fee”) in such amounts, and on such terms and conditions as set forth in Section 4.07 of the Company LLC Agreement. Notwithstanding the foregoing, the Investment Manager may, in its sole discretion, request that all or any portion of the Investment Management Fee otherwise payable by the Company instead be paid by the Fund; *provided, *that (x) no Feeder Fund shall bear (directly or indirectly) an amount greater than its allocable portion of such Investment Management Fee (subject to and in accordance with the applicable Partnership Agreement) that it otherwise would have borne had the Company paid such Investment Management Fee, and (y) without limiting the foregoing, any such amount so borne by Holdco shall be without duplication of such amounts collectively borne by, and no greater in the aggregate than such allocable portion applicable collectively to, the Delaware Blocked Feeder and the Cayman Blocked Feeder.
(b)Expenses.
(i) At its expense and from its own assets, the Investment Manager shall be responsible for the (x) compensation of its employees or the employees of the General Partner or their respective Affiliates who provide services to the Fund or the Company under this Agreement, including administration, portfolio management and other services (to the extent applicable), (y) cost of its office space, office furnishings and equipment, telephone service, heat, utilities, stationery, postage, supplies and similar miscellaneous office expenses and (z) other items of an overhead and administrative nature necessary to provide the services under this Agreement.
-5-
(ii) To the extent any Investment Expenses or Company Expenses are paid by the Investment Manager from its own funds, such Investment Expenses and Company Expenses (as applicable) shall be reimbursed by the Fund or the Company (as applicable); *provided, however, *that the Fund and the Company, as applicable, shall only be obligated to reimburse the Investment Manager for such Investment Expenses or Company Expenses to the extent such Investment Expenses or Company Expenses are incurred out-of-pocket by the Investment Manager on behalf of the Fund or the Company, as applicable.
12.Non-Exclusive Activities. Subject to the Partnership Agreements and the Company LLC Agreement, nothing in this Agreement shall be construed to restrict the right of the Investment Manager or its Affiliates to act and continue to act as an investment manager or adviser for any other Person or to perform investment management or other services for any other Person, nor shall this Agreement be deemed to restrict in any way the freedom of the Investment Manager or its Affiliates to conduct any other business venture of any nature or to make investments for its accounts or the accounts of any other Person. Notwithstanding the foregoing, however, the Investment Manager shall devote sufficient resources, as reasonably determined by the Investment Manager, to discharge its obligations hereunder. The Investment Manager may, with respect to any Investment in which the Fund is a participant or Company Investment in which the Company is a participant, also render advice and service to each and every other participant therein, as well as to the Fund and the Company (if applicable).
13.Assignment. The Investment Manager, or any Affiliate of the Investment Manager which hereinafter becomes the successor to or assignee of the Investment Manager pursuant to and in accordance with this Agreement, shall not have the right, without the consent of the Fund and the Company, to assign its rights and obligations hereunder as Investment Manager, except that the Investment Manager or such Affiliate may assign its rights and obligations hereunder without the consent of the Fund or the Company to any Affiliate of the Investment Manager and to enter into duly executed and acknowledged written instruments of assignment, to be delivered to the Fund and the Company within five Business Days after such assignment. If following any such assignment to an Affiliate of the Investment Manager, such assignee of the Investment Manager ceases to be an Affiliate of the Investment Manager, the rights and obligations hereunder shall be assigned back to the Investment Manager.
14.Limitation of Liability; Indemnification. The parties hereto acknowledge that the Investment Manager constitutes an “Indemnified Party” as described in the Partnership Agreements and the Company LLC Agreement and it and its related persons (as described in such defined term under the Partnership Agreements and the Company LLC Agreement) are third party beneficiaries of the exculpation and indemnification provisions set forth in Section 6.04 of the Partnership Agreements and Section 6.07 of the Company LLC Agreement (or, in the absence of being third party beneficiaries, each of the Fund and the Company hereby indemnifies and holds harmless the Investment Manager and its Affiliates, officers, directors, employees, shareholders, managers, members, consultants, partners and agents to the same extent, on the same terms and subject to the same conditions as set forth in the Partnership Agreements and the Company LLC Agreement, as applicable).
15.Term and Termination.
(a)The term of this Agreement shall commence on the Initial Closing and shall continue in full force and effect until the earlier of (x) the election of the Investment Manager to terminate this Agreement following an Initial Public Offering and (y) the date of the removal of the General Partner as general partner of all of the Feeder Funds and Holdco.
(b)Notwithstanding any termination of this Agreement, the Investment Manager and its Affiliates will continue to be entitled to all indemnity rights, expense reimbursement provisions and other similar benefits under this Agreement, all of the Partnership Agreements and the Company LLC Agreement or otherwise relating to the period prior to the effective date of such termination, and the
-6-
Company will pay all fees payable to the Investment Manager or any of its Affiliates through the effective date as of which the Investment Manager is so terminated.
16.Obligations on Termination. Upon any termination of this Agreement for any reason, the Investment Manager shall (i) deliver to each of the Fund and the Company a full accounting of its activities on behalf of the Fund and the Company, respectively, under this Agreement and covering the period following the date of the last accounting furnished to the Fund or the Company, respectively; and (ii) deliver to the Fund all Investments of the Fund and any and all documents or instruments evidencing the ownership of such Investments then in the custody of the Investment Manager pursuant to and in accordance with Section 10. The obligations of the parties under this Section 16 shall survive termination of this Agreement.
17.Miscellaneous.
(a)Governing Law. This Agreement, and the application or interpretation thereof, shall be governed exclusively by its terms and by the laws of the State of Delaware, excluding the conflict of laws provisions thereof.
(b)Counterparts. This Agreement may be executed in any number of separate counterparts, each of which shall together be deemed an original, but the several counterparts shall together constitute one and the same Agreement of the parties hereto.
(c)*Integration; Amendment.*This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, may not be modified, waived, or terminated orally, and may only be amended by an agreement in writing signed by the parties hereto.
(d)Severability. If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be held contrary to express law or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remainder of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement.
(e)No Joint Venture. For all purposes of this Agreement, the Investment Manager shall be deemed to be an independent contractor of the Fund and the Company. Neither of the Fund nor the Company, on the one hand, and the Investment Manager, on the other hand, are partners or joint venturers with each other and nothing herein shall be construed to make them such partners or joint venturers.
(f)Notices. Any notice or communication to be given under this Agreement will be made in writing and will be (i) mailed by first-class, registered or certified mail, return receipt requested, postage prepaid, (ii) transmitted by hand delivery, or (iii) sent by confirmed overnight delivery. All such notices or communications will be deemed to have been transmitted (i) if by first-class, registered or certified mail, on the fifth business day after the mailing thereof, (ii) if by hand delivery, on the day of such delivery and (iii) if by confirmed overnight delivery, on the date of such delivery. Any notices to the Investment Manager shall be sent to Melodeon Capital Partners, LP, 717 Fifth Avenue, 12th Floor, New York, New York 10022. Any notices to the Fund shall be sent to its address set forth in (and as may be modified under) the applicable Partnership Agreement, and any notices to the Company shall be sent to its address set forth in (and as may be modified under) the Company LLC Agreement.
-7-
IN WITNESS WHEREOF, the parties hereto, by their duly authorized representatives, have executed this Agreement as of the date first above written.
| | THE INVESTMENT MANAGER: | |
| | | |
| | MELODEON CAPITAL PARTNERS, LP | |
| | | |
| | By:** MELODEON CAPITAL PARTNERS, GP, LLC**, its general partner | |
| | | |
| | By: | /s/ Halle Benett |
| | | Name: Halle Benett |
| | | Title: Authorized Person |
| | | |
| | THE GENERAL PARTNER AND THE FUND: | |
| | | |
| | MELODEON LBS GP, LLC, on its own behalf and as general partner on behalf of each Feeder Fund and Holdco | |
| | | |
| | By:** MELODEON CAPITAL HOLDCO, LLC**, its sole member | |
| | | |
| | By:** MELODEON CAPITAL HOLDINGS GP, LLC**, its managing member | |
| | | |
| | By: | /s/ Halle Benett |
| | | Name: Halle Benett |
| | | Title: Authorized Person |
| | | |
| | THE COMPANY: | |
| | | |
| | LEGAL BUSINESS SERVICES LLC | |
| | | |
| | By: | /s/ Halle Benett |
| | | Name: Halle Benett |
| | | Title: Authorized Person |
[Signature page to Melodeon LBS Investment Management Agreement]