Exhibit (g)(4)
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SUB-INVESTMENT ADVISORY AGREEMENT
This AGREEMENT, dated April 25, 2003, is by and between
Advantage Advisers Multi-Sector Fund I, a Delaware business trust (the
"Fund"), Advantage Advisers, L.L.C., a Delaware limited liability company (the
"Investment Adviser"), and Alkeon Capital Management, LLC, a Delaware limited
liability company (the "Sub-Adviser").
WHEREAS, the Investment Adviser has agreed to furnish
investment advisory services to the Fund, a non-diversified, closed-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act");
WHEREAS, the Fund has heretofore filed a Registration
Statement on Form N-2 with the Securities and Exchange Commission (the "SEC")
(as amended or supplemented from time to time, the "Registration Statement")
which includes a prospectus (the "Prospectus") and a statement of additional
information (the "Statement of Additional Information");
WHEREAS, the Investment Adviser and the Fund each wish to
retain the Sub-Adviser to provide the Investment Adviser and the Fund with
certain sub-advisory services as described below in connection with Investment
Adviser's advisory activities on behalf of the Fund;
WHEREAS, the investment advisory agreement between the
Investment Adviser and the Fund dated April 25, 2003 (such agreement or the
most recent successor agreement between such parties relating to advisory
services to the Fund is referred to herein as the "Advisory Agreement")
contemplates that the Investment Adviser may sub-contract investment advisory
services with respect to the Fund to one or more sub-advisers pursuant to one
or more sub-investment advisory agreements agreeable to the Fund and approved
in accordance with the provisions of the 1940 Act; and
WHEREAS, this agreement has been approved in accordance with
the provisions of the 1940 Act and the Sub-Adviser is willing to provide such
services upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual premises and
covenants herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, it is agreed by and between the
parties hereto as follows:
Section 1. General. The Investment Adviser and the Fund
hereby appoint the Sub-Adviser to act as sub-adviser with respect to the
technology Separate Investment Account (as defined in the Prospectus) and the
Sub-Adviser accepts such appointment and agrees, all as fully set forth
herein, to act as a sub-adviser to the Fund with respect to the investment of
the technology Separate Investment Account's assets and to supervise and
arrange for the day-to-day operations of the technology Separate Investment
Account and the purchase of securities for and the sale of securities held in
the technology Separate Investment Account.
Section 2. Duties and Obligations of the Sub-Adviser with
Respect to Investment of Assets of the Fund. Subject to the succeeding
provisions of this Section 2 and the oversight and supervision of the
Investment Adviser and subject to the direction and control of the Fund's
Board of Trustees, the Sub-Adviser shall:
(a) act as investment adviser for, and invest and
reinvest, the technology Separate Investment Account's assets and, in
connection therewith, have complete discretion in purchasing and selling
securities and other assets for the technology Separate Investment Account and
in voting, exercising consents and exercising all other rights appertaining to
such securities and other assets on behalf of the Fund consistent with the
investment objective, policies and restrictions of the Fund, subject to the
oversight and supervision of the Investment Adviser and to the direction and
control of the Fund's Board of Trustees;
(b) supervise continuously the investment program of
the technology Separate Investment Account and the composition of its
investment portfolio;
(c) arrange, subject to the provisions of paragraph 4
hereof, for the purchase and sale of securities and other assets held in the
technology Separate Investment Account; and
(d) provide, or arrange to have provided, investment
research to the Fund.
Section 3. [Reserved].
Section 4. Covenants. In the performance of its duties under
this Agreement, the Sub-Adviser shall at all times:
(a) Conform to, and act in accordance with, any
requirements imposed by: (i) the provisions of the 1940 Act and the Advisers
Act, and all applicable Rules and Regulations of the SEC; (ii) any other
applicable provisions of law; (iii) the provisions of the Amended and Restated
Agreement and Declaration of Trust and By-laws of the Fund, as such documents
may be amended from time to time; (iv) the investment strategy and investment
policies of the Fund as set forth in the Registration Statement; and (v) any
policies and determinations of the Board of Trustees of the Fund as
communicated in writing to the Sub-Adviser.
(b) Without limiting the generality of paragraph (a)
hereof, the Sub-Adviser shall be authorized to open, maintain and close
accounts in the name and on behalf of the Fund with brokers and dealers as it
determines are appropriate; to select and place orders either directly with
the issuer or with any broker or dealer. Subject to the other provisions of
this paragraph, in placing orders with brokers and dealers, the Sub-Adviser
will seek to obtain the best price and execution, taking into account factors
such as price, size of order, difficulty of execution and operational
facilities of a brokerage firm, the scope and quality of brokerage services
provided, and in the case of transactions effected with unaffiliated brokers,
the firm's risk in positioning a block of securities. Consistent with this
principle, the Sub-Adviser may place brokerage orders with brokers (including
affiliates of the Fund) that provide supplemental research, market and
statistical information, including advice as to the value of securities, the
advisability of investing in, purchasing or selling securities, and the
availability of securities or purchasers or sellers of securities, and furnish
analyses and reports concerning issuers, industries, securities, economic
factors and trends, portfolio strategy and the performance of accounts.
Information and research received from such brokers will be in addition to,
and not in lieu of, the services required to be performed by the Investment
Adviser hereunder. A commission paid to such brokers may be higher than that
which another qualified broker would have charged for effecting the same
transaction, provided that the Sub-Adviser determines in good faith that such
commission is reasonable in terms either of the transaction or the overall
responsibility of the Sub-Adviser to the Fund and its other clients and that
the total commissions paid by the Fund will be reasonable in relation to the
benefits to the Fund over the long-term. In addition, the Sub-Adviser is
authorized to take into account the sale of shares of the Fund in allocating
purchase and sale orders for portfolio securities to brokers or dealers
(including brokers and dealers that are affiliated with the Sub-Adviser, the
Investment Adviser or another of the Fund's sub-advisers); provided that the
Sub-Adviser believes that the quality of the transaction and the commission
are comparable to what they would be with other qualified firms. In no
instance, however, will the Fund's securities be purchased from or sold to the
Investment Adviser, or any affiliated person thereof, except to the extent
permitted by the SEC or by applicable law.
(c) Maintain books and records with respect to the
technology Separate Investment Account's securities transactions and will
render to the Investment Adviser and the Board of Trustees such periodic and
special reports as they may request.
(d) Keep the Fund and the Investment Adviser informed
of developments materially affecting the technology Separate Investment
Account and shall, on its own initiative, furnish to the Fund from time to
time whatever information the Sub-Adviser believes appropriate for this
purpose. The Sub-Adviser will periodically communicate to the Investment
Adviser, at such times as the Investment Adviser may direct, information
concerning the purchase and sale of securities for the technology Separate
Investment Account, including: (i) the name of the issuer, (ii) the amount of
the purchase or sale, (iii) the name of the broker or dealer, if any, through
which the purchase or sale is effected, (iv) the CUSIP number of the
instrument, if any, and (v) such other information as the Investment Adviser
may reasonably require for purposes of fulfilling its obligations to the Fund
under the Advisory Agreement.
(e) Will treat confidentially and as proprietary
information of the Fund all records and other information relative to the
Fund, and pertaining to the Fund's prior, current or potential shareholders
with respect to their investment in the Fund, in a manner consistent with the
Privacy Notification Policy of the Fund set forth in the Registration
Statement (as amended or supplemented from time to time) and will not use such
records and information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Fund, which approval shall not be unreasonably
withheld and may not be withheld where the Investment Adviser may be exposed
to civil or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, or when
so requested by the Fund.
(f) Will do and perform any such further acts and
things related to the management of the technology Separate Investment Account
or the performance of any other duty, obligation or agreement hereunder as the
Investment Adviser may from time to time reasonably request.
(g) If any of its affiliates conducts a commercial
banking operation, (i) it will maintain a policy and practice of conducting
its investment advisory services hereunder independently of said commercial
banking operations and (ii) when it makes investment recommendations for the
technology Separate Investment Account, its investment advisory personnel will
not inquire or take into consideration whether the issuer of securities
proposed for purchase or sale for the technology Separate Investment Account
are customers of the commercial department of its affiliates.
Section 5. Services Not Exclusive. Nothing in this Agreement
shall prevent the Sub-Adviser or any member, manager, officer, employee or
other affiliate thereof from acting as investment adviser for any other
person, firm or corporation, or from engaging in any other lawful activity,
and shall not in any way limit or restrict the Sub-Adviser or any of its
members, manager, officers, employees or agents from buying, selling or
trading any securities for its or their own accounts or for the accounts of
others for whom it or they may be acting; provided, however, that the
Sub-Adviser will undertake no activities which, in its judgment, will
adversely affect the performance of its obligations under this Agreement.
Section 6. Books and Records. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Sub-Adviser hereby agrees
that all records which it maintains for the Fund are the property of the Fund
and further agrees to surrender promptly to the Fund any such records upon the
Fund's request. The Investment Adviser further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
Section 7. Agency Cross Transactions. From time to time, the
Sub-Adviser or brokers or dealers affiliated with it may find themselves in a
position to buy for certain of their brokerage clients (each an "Account")
securities which the Sub-Adviser's investment advisory clients wish to sell,
and to sell for certain of their brokerage clients securities which advisory
clients wish to buy. Where one of the parties is an advisory client, the
Sub-Adviser or the affiliated broker or dealer cannot participate in this type
of transaction (known as a cross transaction) on behalf of an advisory client
and retain commissions from one or both parties to the transaction without the
advisory client's consent. This is because in a situation where the
Sub-Adviser is making the investment decision (as opposed to a brokerage
client who makes his own investment decisions), and the Sub-Adviser or an
affiliate is receiving commissions from both sides of the transaction, there
is a potential conflicting division of loyalties and responsibilities on the
Sub-Adviser's part regarding the advisory client. The SEC has adopted a rule
under the Advisers Act which permits the Sub-Adviser or its affiliates to
participate on behalf of an Account in agency cross transactions if the
advisory client has given written consent in advance. By execution of this
Agreement, the Fund authorizes the Sub-Adviser or its affiliates to
participate in agency cross transactions involving an Account. The Fund may
revoke its consent at any time by written notice to the Sub-Adviser.
Section 8. Expenses. During the term of this Agreement, the
Sub-Adviser will bear all costs and expenses of its employees and any overhead
incurred in connection with its duties hereunder and shall bear the costs of
any salaries or trustees fees of any officers or trustees of the Fund who are
affiliated persons (as defined in the 0000 Xxx) of the Sub-Adviser.
Section 9. Compensation of the Investment Adviser. As
compensation for all services rendered by the Sub-Adviser hereunder, the
Investment Adviser from the "Management Fee" (as defined in the Advisory
Agreement) will pay the Sub-Adviser an amount equal to 0.25% of the average
daily net assets of the technology Separate Investment Account. Such fee will
be due and payable by the Investment Adviser in arrears within ten business
days after the receipt thereof from the Fund.
Section 10. Indemnity.
(a) The Fund hereby agrees to indemnify the
Sub-Adviser, and each of the Sub-Adviser's members, managers, officers,
employees, agents, associates and controlling persons and the directors,
partners, members, officers, employees and agents thereof (including any
individual who serves at the Sub-Adviser's request as director, officer,
partner, member, trustee or the like of another entity) (each such person
being an "Indemnitee") against any liabilities and expenses, including amounts
paid in satisfaction of judgments, in compromise or as fines and penalties,
and counsel fees (all as provided in accordance with applicable state law)
reasonably incurred by such Indemnitee in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or investigative body in which
such 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 acting in
any capacity set forth herein or thereafter by reason of such Indemnitee
having acted in any such capacity, except with respect to any matter as to
which such Indemnitee shall have been adjudicated not to have acted in good
faith in the reasonable belief that such Indemnitee's action was in the best
interest of the Fund and furthermore, in the case of any criminal proceeding,
so long as such Indemnitee had no reasonable cause to believe that the conduct
was unlawful; provided, however, that (1) no Indemnitee shall be indemnified
hereunder against any liability to the Fund or its shareholders or any expense
of such Indemnitee arising by reason of (i) willful misfeasance, (ii) bad
faith, (iii) gross negligence or (iv) reckless disregard of the duties
involved in the conduct of such Indemnitee's position (the conduct referred to
in such clauses (i) through (iv) being sometimes referred to herein as
"disabling conduct"), (2) as to any matter disposed of by settlement or a
compromise payment by such Indemnitee, pursuant to a consent decree or
otherwise, no indemnification either for said payment or for any other
expenses shall be provided unless there has been a determination that such
settlement or compromise is in the best interests of the Fund and that such
Indemnitee appears to have acted in good faith in the reasonable belief that
such Indemnitee's action was in the best interest of the Fund and did not
involve disabling conduct by such Indemnitee and (3) with respect to any
action, suit or other proceeding voluntarily prosecuted by any Indemnitee as
plaintiff, indemnification shall be mandatory only if the prosecution of such
action, suit or other proceeding by such Indemnitee was authorized by a
majority of the full Board of Trustees of the Fund.
(b) The Fund shall make advance payments in connection
with the expenses of defending any action with respect to which
indemnification might be sought hereunder if the Fund receives a written
affirmation of the Indemnitee's good faith belief that the standard of conduct
necessary for indemnification has been met and a written undertaking to
reimburse the Fund unless it is subsequently determined that such Indemnitee
is entitled to such indemnification and if the trustees of the Fund determine
that the facts then known to them would not preclude indemnification. In
addition, at least one of the following conditions must be met: (A) the
Indemnitee shall provide a security for such Indemnitee-undertaking, (B) the
Fund shall be insured against losses arising by reason of any lawful advance,
or (C) a majority of a quorum consisting of trustees of the Fund who are
neither "interested persons" of the Fund (as defined in Section 2(a)(19) of
the 0000 Xxx) nor parties to the proceeding ("Disinterested Non-Party
Trustees") or an independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the Indemnitee
ultimately will be found entitled to indemnification.
(c) All determinations with respect to indemnification
hereunder shall be made (1) by a final decision on the merits by a court or
other body before whom the proceeding was brought that such Indemnitee is not
liable or is not liable by reason of disabling conduct, or (2) in the absence
of such a decision, by (i) a majority vote of a quorum of the Disinterested
Non-Party Trustees of the Fund, or (ii) if such a quorum is not obtainable or,
even if obtainable, if a majority vote of such quorum so directs, independent
legal counsel in a written opinion. All determinations that advance payments
in connection with the expense of defending any proceeding shall be authorized
shall be made in accordance with the immediately preceding clause (2) above.
The rights accruing to any Indemnitee under these provisions
shall not exclude any other right to which such Indemnitee may be lawfully
entitled.
Section 11. Limitation on Liability.
(a) The Sub-Adviser will not be liable for any error
of judgment or mistake of law or for any loss suffered by Sub-Adviser or by
the Fund in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its duties under this Agreement.
(b) Notwithstanding anything to the contrary contained
in this Agreement, the parties hereto acknowledge and agree that, as provided
in Section 5.4 of Article V of the Amended and Restated Agreement and
Declaration of Trust of the Fund, this Agreement is executed by the Trustees
and/or officers of the Fund, not individually but as such Trustees and/or
officers of the Fund, and the obligations hereunder are not binding upon any
of the Trustees or shareholders of the Fund individually, but bind only the
estate of the Fund.
Section 12. Duration and Termination. This Agreement shall
become effective as of the date hereof and, unless sooner terminated with
respect to the Fund as provided herein, shall continue in effect for a period
of two years. Thereafter, if not terminated, this Agreement shall continue in
effect with respect to the Fund for successive periods of 12 months; provided
that such continuance is specifically approved at least annually by both (a)
the vote of a majority of the Fund's Board of Trustees or the vote of a
majority of the outstanding voting securities of the Fund at the time
outstanding and entitled to vote, and (b) the vote of a majority of the
Trustees who are not parties to this Agreement or interested persons of any
party to this Agreement, cast in person at a meeting called for the purpose of
voting on such approval. Notwithstanding the foregoing, this Agreement may be
terminated by the Fund at any time, without the payment of any penalty, upon
giving the Sub-Adviser 60 days' written notice (which notice may be waived by
the Sub-Adviser); provided that such termination by the Fund shall be directed
or approved by the vote of a majority of the Trustees of the Fund in office at
the time or by the vote of the holders of a majority of the voting securities
of the Fund at the time outstanding and entitled to vote, or by the
Sub-Adviser on 60 days' written notice (which notice may be waived by the
Fund). This Agreement will also immediately terminate in the event of its
assignment. (As used in this Agreement, the terms "majority of the outstanding
voting securities," "interested person" and "assignment" shall have the
meanings provided such terms in the 1940 Act and the rules thereunder.)
Section 13. Notices. Any notice under this Agreement shall
be in writing to the other party at such address as the other party may
designate from time to time for the receipt of such notice and shall be deemed
to be received on the earlier of the date actually received or on the fourth
day after the postmark if such notice is mailed first class postage prepaid.
Section 14. Amendment of this Agreement. No provision of
this Agreement may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the party against which enforcement
of the change, waiver, discharge or termination is sought. Any amendment of
this Agreement shall be subject to the 1940 Act.
Section 15. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware for
contracts to be performed entirely therein without reference to choice of law
principles thereof and in accordance with the applicable provisions of the
1940 Act.
Section 16. Miscellaneous. 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.
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. This Agreement shall be binding on, and shall inure
to the benefit of the parties hereto and their respective successors.
Section 17. Counterparts. This Agreement may be executed in
counterparts by the parties hereto, each of which shall constitute an original
counterpart, and all of which, together, shall constitute one Agreement.
IN WITNESS WHEREOF, the parties hereto have caused the
foregoing instrument to be executed by their duly authorized officers, all as
of the day and the year first above written.
ADVANTAGE ADVISERS MULTI-SECTOR FUND I
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Chairman
ADVANTAGE ADVISERS, L.L.C.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Managing Director
ALKEON CAPITAL MANAGEMENT, LLC
By: /s/ Panayotis Sparaggis
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Name: Panayotis Sparaggis
Title:
