Exhibit 10.1
INTERIM INVESTMENT ADVISORY AGREEMENT
MACC PRIVATE EQUITIES INC.
A Delaware Corporation
This INTERIM INVESTMENT
ADVISORY AGREEMENT dated as of April 30, 2005 (the
"Agreement") by MACC Private
Equities Inc., a company
organized under the laws
of the State of Delaware ("the Company"), and InvestAmerica
Investment Advisors,
Inc.,
a
corporation
organized
under
the
laws
of
the
State
of
Delaware
("InvestAmerica").
WHEREAS,
the
Company
is a
closed-end
investment
company
that
may be
operated and regulated as a business development company ("Business
Development
Company")
as defined in the
Investment
Company Act of 1940,
as amended
(the
"ICA");
WHEREAS, InvestAmerica is qualified to provide investment advisory
services
to the Company and is registered as an investment
advisor under the
Investment
Advisors Act of 1940, as amended.
NOW,
THEREFORE,
in
consideration
of the
foregoing
and other
good and
valuable consideration, the parties hereto agree as follows:
Section 1.
Definitions
.
1.1
"Affiliate"
shall
have
the
meaning
given
under
Rule
144 of the
Securities Act of 1933, as amended.
1.2
"Assets Under
Management" shall mean the total value of the Company's
assets managed by InvestAmerica under this Agreement.
1.3
"Capital Losses" are those which are placed, consistent with
generally
accepted
accounting
principles,
on the books of the
Company
and which occur
when:
(a) An actual or realized loss is sustained owing to Portfolio
Company
or
investment
events
including,
but not
limited
to,
liquidation,
sale or
bankruptcy;
(b) The Board of
Directors of the Company
determines
that a loss or
depreciation
in value
from the value on the date of this
Agreement
should be
taken by the Company in accordance with generally accepted
accounting principles
and SBA
accounting
regulations
and is
shown
on its
books
as a part of the
periodic
valuation
of the
Portfolio
Companies
by
the
Board
of
Directors
("Unrealized Depreciation"); or
(c) Capital Losses are adjusted for reverses of depreciation
when the
Board of Directors
determines
that a value
should be adjusted
upward and the
investment value remains at or below original cost.
1
For purposes of this definition, in any case where the Board of
Directors of the
Company writes down the value of any
investment in the Company's
portfolio (in
accordance
with the standards set forth in subsection
1.3(b) above),
(i) such
reduction in value shall result in a new cost basis for such
investment and (ii)
the most recent cost basis for such investment
shall
thereafter be used in the
determination
of any Realized
Capital Gains or Capital Losses in the Company's
portfolio
(i.e.,
there shall be no
double-counting
of losses when a security
(whose value has declined in a prior period) is ultimately sold at
a price below
its historical cost.)
1.4
"The
Company"
shall
mean MACC
Private
Equities
Inc.,
a Delaware
corporation.
1.5
"ICA" has the meaning set forth in the first recital hereof.
1.6
"Net Capital
Gains" shall mean Realized
Capital Gains net of Capital
Losses determined in accordance with generally accepted accounting
principles.
1.7
"Other Venture
Capital Funds" has the meaning set forth in subsection
3.2.
1.8
"Portfolio Company" or "Portfolio
Companies" shall mean any entity in
which the Company may make an investment and with respect to which
InvestAmerica
will be
providing
services
pursuant
hereto,
which
investments
may include
ownership of capital stock,
loans,
receivables due from a Portfolio Company or
other debtor on sale of assets
acquired in liquidation
and assets
acquired in
liquidation of any Portfolio Company.
1.9
"Private
Capital"
has the
meaning
ascribed to that term in the SBA
regulations
in effect as of the date hereof (which
regulations
define Private
Capital to exclude unrealized gains and losses).
1.10 "Realized
Capital Gains" shall mean capital gains after deducting the
cost and
expenses
necessary
to achieve the gain (e.g.,
broker's
fees).
For
purposes of this
Agreement,
capital gains are Realized
Capital Gains upon the
cash sale of the
capital
stock or assets of a
Portfolio
Company or any other
asset or item of property managed by InvestAmerica
pursuant to the terms hereof
or any Realized
Capital Gain has occurred in accordance
with GAAP which is not
cash as described in the following
sentence.
Realized Capital Gains other than
cash gains, shall be recorded and calculated in the period the gain
is realized;
however in
determining
payment of any incentive fee, the payment shall be made
when the cash is received. The amount of the fee earned on gains
other than cash
shall be recorded as incentive
fees payable on the financial
statements of the
Company.
1.11 "SBA" shall mean the United States Small Business
Administration.
1.12 "SEC" shall mean the United States Securities and Exchange
Commission.
Section 2.
Investment
Advisory
Engagement
.
The Company
hereby
engages
InvestAmerica as its investment advisor.
2.1
As such, InvestAmerica will:
2
(a)
Manage,
render
advice
with
respect
to,
and
make
decisions
regarding the
acquisition
and
disposition
of
securities in accordance
with
applicable law and the Company's
investment policies as set forth in writing by
the Board of Directors, to include (without limitation) the search
and marketing
for
investment
leads,
screening
and
research of
investment
opportunities,
maintenance
and
expansion
of a
co-investor
network,
review of
appropriate
investment
legal
documentation,
presentations of investments to the Company's
Board of Directors (when and as required),
closing of
investments,
monitoring
and management of investments and exits,
preparation of valuations,
management
of relationships with the SEC, shareholders, outside auditors, and
the provision
of other services
appropriate
to the management of a Business and
Development
Company;
(b) Make
available
and,
if
requested
by
Portfolio
Companies
or
entities
in which
the
Company
is
proposing
to
invest,
render
managerial
assistance to, and exercise
management rights in, such Portfolio
Companies and
entities as
appropriate
to maximize
return for the Company and to comply with
regulations;
(c) Maintain
office space and
facilities
to the extent
required by
InvestAmerica to provide adequate management services to the
Company;
(d) Maintain the books of account and other
records and files for the
Company, but not to include auditing services; and
(e) Report to the Company's Board of Directors, or to any committee
or
officers acting pursuant to the authority of the Board, at such
reasonable times
and in such reasonable
detail as the Board deems appropriate in order to enable
the
Company to
determine
that
investment
policies
are being
observed
and
implemented
and that the
obligations
of
InvestAmerica
hereunder
are
being
fulfilled.
Any investment program
undertaken by InvestAmerica
pursuant hereto
and any other
activities
undertaken by
InvestAmerica on behalf of the Company
shall at all
times be
subject
to
applicable
law and any
directives
of the
Company's Board of Directors or any duly constituted committee or
officer acting
pursuant to the authority of the Company's Board of Directors.
2.2
InvestAmerica
will be
responsible
for the following
expenses:
its
staff
salaries and fringes,
office
space,
office
equipment
and
furniture,
communications,
travel, meals and entertainment,
conventions, seminars, office
supplies,
dues and
subscriptions,
hiring fees,
moving
expenses,
repair and
maintenance,
employment
taxes,
in-house
accounting
expenses
and
minor
miscellaneous expenses.
InvestAmerica
will
pay for its
own
account
all
expenses
incurred
in
rendering the services to be rendered hereunder. Without limiting
the generality
of the
foregoing,
InvestAmerica
will
pay the
salaries
and
other
employee
benefits
of the persons in its
organization
whom it may engage to render such
services, including without limitation, persons in its organization
who may from
time to time act as officers of the Company.
3
Notwithstanding
the
foregoing,
InvestAmerica
will
earn
incentive
compensation
on
a
quarterly
basis,
which
shall
not
be
deemed
part
of
compensation or other employee benefits for the purpose of this
paragraph.
2.3
In connection with the services
provided,
InvestAmerica
will not be
responsible for the following expenses which shall be the sole
responsibility of
the Company and will be paid promptly by the Company:
auditing
fees; all legal
expenses; legal fees normally paid by Portfolio Companies;
National Association
of Small Business
Investment
Companies and other appropriate trade association
fees; brochures, advertising,
marketing and publicity costs; interest on SBA or
other debt;
fees to the Company and its directors and Board fees; any fees owed
or paid to the Company,
its Affiliates or fund
managers;
any and all expenses
associated with property of a Portfolio Company taken or received
by the Company
or on its behalf as a result of its
investment
in any Portfolio
Company;
all
reorganization
and
registration
expenses
of
the
Company;
the
fees
and
disbursements of the Company's counsel,
accountants,
custodian, transfer agent
and
registrar;
fees and expenses
incurred in producing and effecting
filings
with federal and state securities administrators;
costs
