Exhibit g(2)
FORM OF
SUBADVISORY AGREEMENT
AGREEMENT made this ___day of January, 2007, by and among PARADIGM Multi
Strategy Fund I, LLC, a Delaware limited liability company (the "Company"), and
Provident Asset Management, LLC, a Delaware limited liability company (the
"Investment Manager") and PARADIGM Global Advisors, LLC, a Delaware limited
liability company (the "Subadvisor").
WHEREAS, the Company is registered as a non-diversified, closed-end
management investment company under the Investment Company Act of 1940, as
amended (the "Investment Company Act");
WHEREAS, the Company has retained BISYS Fund Services Ohio, Inc. (the
"Administrator") to provide administration of the Company's operations, subject
to the control of the Board of Directors;
WHEREAS, pursuant to that certain investment advisory agreement dated as
of January ___, 2007, between the Company and the Investment Manager (the
"Investment Advisory Agreement"), the Investment Manager was retained to manage
the investment and reinvestment of the assets of the Company and to provide such
other services as specified therein;
WHEREAS, the Investment Advisory Agreement contemplates the retention by
the Investment Manager of a subadvisor;
WHEREAS, the Investment Manager deems it necessary to avail itself of the
experience, resources and facilities of the Subadvisor and desires to retain the
Subadvisor to render investment management services to the Company; and
WHEREAS, the Subadvisor hereby accepts such retainer upon the terms and
conditions herein set forth.
NOW, THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows:
1. DUTIES OF SUBADVISOR. The Investment Manager employs the Subadvisor to
manage the investment and reinvestment of the assets of the Company, and to
continuously review, supervise and (where appropriate) administer the investment
program of the Company, to determine in its discretion (where appropriate) the
investments to be purchased or sold, to provide the Administrator and the
Company with records concerning the Subadvisor's activities which the Company is
required to maintain, and to render regular reports to the Administrator and to
the Company's officers and Directors concerning the Subadvisor's discharge of
the foregoing responsibilities.
The Subadvisor shall discharge the foregoing responsibilities
subject to the control of the Investment Manager and in compliance with such
policies as the Directors may from time to time establish, and in compliance
with the objectives, policies, and limitations of the Company as set forth in
its Prospectus, Statement of Additional Information and Operating Agreement, as
amended from time to time, and applicable laws and regulations.
The Subadvisor accepts such employment and agrees, at its own
expense, to render the services and to provide the office space, furnishings and
equipment and the personnel required by it to perform the services on the terms
and for the compensation provided herein. The Subadvisor will not, however, pay
for the cost of securities, commodities, and other investments (including
brokerage commissions and other transaction charges, if any) purchased or sold
for the Company.
2. COMPANY TRANSACTIONS. The Subadvisor is authorized to select the
brokers or dealers that will execute the purchases and sales of the Company's
investments and is directed to use its best efforts to obtain the best net
results as described from time to time in the Company's Prospectus and Statement
of Additional Information. The Subadvisor will promptly communicate to the
Administrator and to the officers and the Directors of the Company such
information relating to the Company's investment transactions as they may
reasonably request.
It is understood that the Subadvisor will not be deemed to have
acted unlawfully, or to have breached a fiduciary duty to the Company or be in
breach of any obligation owing to the Company under this Agreement, or
otherwise, by reason of its having directed a securities transaction on behalf
of the Company to a broker-dealer in compliance with the provisions of Section
28(e) of the Securities Exchange Act of 1934, as amended, or as described from
time to time by the Company's Prospectus and Statement of Additional
Information.
3. COMPENSATION OF THE SUBADVISOR. For the services to be rendered by the
Subadvisor as provided in Sections 1 and 2 of this Agreement, the Subadvisor is
entitled to receive from persons who purchase Units of the Company ("Members")
an annual management fee (the "Management Fee") in the amount set forth in
Schedule A annexed hereto as the same may be amended from time to time as agreed
by the parties hereto. The Subadvisor's fee is calculated and accrued monthly
and is paid out to the Subadvisor on a monthly basis. For purposes of
determining the Management Fee, net assets will be determined by taking into
account net realized gain or loss and the net change in unrealized appreciation
or depreciation of net assets.
All rights of compensation under this Agreement for services
performed as of the termination date shall survive the termination of this
Agreement.
4. OTHER EXPENSES. The Subadvisor shall pay all expenses incurred with
respect to the printing and mailing of reports, prospectuses, statements of
additional information, and sales literature relating to the solicitation of
prospective
clients. The Company shall pay all expenses incurred with respect to mailing to
existing Members prospectuses, statements of additional information, proxy
solicitation material and Member reports.
5. EXCESS EXPENSES. If the expenses for the Company for any fiscal year
(including fees and other amounts payable to the Subadvisor, but excluding
interest, taxes, brokerage costs, litigation, and other extraordinary costs) as
calculated every business day would exceed the expense limitations imposed on
investment companies by any applicable statute or regulatory authority of any
jurisdiction in which Units of the Company are qualified for offer and sale, the
Subadvisor shall bear such excess cost.
Payment of expenses by the Subadvisor pursuant to this Section 5 shall be
settled on a monthly basis (subject to fiscal year end reconciliation) by the
Subadvisor.
6. REPORTS. The Company and the Subadvisor agree to furnish to each other,
if applicable, current prospectuses, proxy statements, reports to Members,
certified copies of their financial statements, and such other information with
regard to their affairs as each may reasonably request.
7. STATUS OF SUBADVISOR. The services of the Subadvisor hereunder are not
to be deemed exclusive, and the Subadvisor shall be free to render similar
services to others so long as its services pursuant to this Agreement are not
impaired thereby. The Subadvisor shall be deemed to be an independent contractor
and shall, unless otherwise expressly provided or authorized, have no authority
to act for or represent the Investment Manager or the Company in any way or
otherwise be deemed an agent of the Investment Manager or the Company.
8. CERTAIN RECORDS. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-l and Rule 31a-2 promulgated under the
Investment Company Act which are prepared or maintained by the Subadvisor on
behalf of the Company are the property of the Company and will be surrendered
promptly to the Company on request.
9. LIMITATION OF LIABILITY OF SUBADVISOR. The duties of the Subadvisor
shall be confined to those expressly set forth herein, and no implied duties are
assumed by or may be asserted against the Subadvisor hereunder. The Subadvisor
shall not be liable for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission in carrying out its
duties hereunder, except a loss resulting from willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties hereunder, except as may otherwise be
provided under provisions of applicable state law or Federal securities law
which cannot be waived or modified hereby. (As used in this Paragraph 9, the
term "Subadvisor" shall include directors, officers, employees and other
corporate agents of the Subadvisor [as well as the Limited Liability Company
itself]).
10. PERMISSIBLE INTERESTS. Directors, agents, and Members of the Company
are or may be interested in the Subadvisor (or any successor thereof) as
directors, partners, officers, or Members, or otherwise; directors, partners,
officers, agents, and Members of the Subadvisor are or may be interested in the
Company as Directors, Members or otherwise; and the Subadvisor (or any
successor) is or may be interested in the Company as a Member or otherwise. In
addition, brokerage transactions for the Company may be effected through
affiliates of the Subadvisor if approved by the Board of Directors, subject to
the rules and regulations of the Securities and Exchange Commission (the "SEC").
11. LICENSE OF SUBADVISOR'S NAME. The Subadvisor hereby agrees to grant a
license to the Company for use of its name in the names of the Company for the
term of this Agreement and such license shall terminate upon termination of this
Agreement.
12. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall remain in effect until two years from date of execution,
and thereafter, for periods of one year so long as such continuance thereafter
is specifically approved at least annually (a) by the vote of a majority of
those Directors of the Company who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by the Directors of the Company or
by vote of a majority of the outstanding voting Units of the Company; provided,
however, that if the Members of the Company fail to approve the Agreement as
provided herein, the Subadvisor may continue to serve hereunder in the manner
and to the extent permitted by the Investment Company Act and rules and
regulations thereunder. The foregoing requirement that continuance of this
Agreement be "specifically approved at least annually" shall be construed in a
manner consistent with the Investment Company Act and the rules and regulations
thereunder. This Agreement may be terminated at any time, without the payment of
any penalty by vote of a majority of the Directors of the Company or by vote of
a majority of the outstanding voting Units of the Company on not less than 30
days' nor more than 60 days' written notice to the Subadvisor, or by the
Subadvisor at any time without the payment of any penalty, on 90 days' written
notice to the Investment Manager. This Agreement will automatically and
immediately terminate in the assignment. Any notice under this Agreement shall
be given in writing, addressed and delivered, or mailed postpaid, to the other
party at any office of such party. As used in this Section 12, the terms
"assignment", "interested persons", and a "vote of a majority of the outstanding
voting securities" shall have the respective meanings set forth in the
Investment Company Act and the rules and regulations thereunder; subject to such
exemptions as may be granted by the SEC under said Act.
13. NOTICE. Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified mail,
postage prepaid, addressed by the party giving notice to the other party at the
last address furnished by the other party to the party giving notice: if to the
Company, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000 Attention: ________;
if to the Investment
Manager at 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000, Attention: [Xxxxx
Xxxxx]; and if to the Subadvisor, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX
00000, Attention: __________________.
14. SEVERABILITY. 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.
15. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of New York and the applicable provisions of the
Investment Company Act. To the extent that the applicable laws of the State of
New York, or any of the provisions herein, conflict with the applicable
provisions of the Investment Company Act, the latter shall control.
A copy of the Certificate of Formation of the Company is on file with the
Secretary of the State of Delaware, and notice is hereby given that this
instrument is executed on behalf of the Directors of the Company as Directors,
and are not binding upon any of the Directors, officers, or Members of the
Company individually but binding only upon the assets and property of the
Company.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first written above.
PARADIGM Multi Strategy Fund I, LLC
By: _____________________________________
Attest: _________________________________
Provident Asset Management, LLC
By: _____________________________________
Attest: _________________________________
PARADIGM Global Advisors, LLC
By: _____________________________________
Attest: _________________________________
SCHEDULE A
COMPENSATION OF THE SUBADVISOR
[To be provided.]
