EXHIBIT 10(1)
BELCREST CAPITAL FUND LLC
INVESTMENT ADVISORY AND ADMINISTRATIVE AGREEMENT
AGREEMENT, dated as of November 18, 1998, between Belcrest Capital Fund
LLC, a Massachusetts limited liability company (the "Fund"), and Boston
Management and Research, a Massachusetts business Trust (the "Adviser"). Unless
otherwise defined, capitalized terms shall have the meanings ascribed to them in
the Fund's private placement memorandum, as amended or supplemented.
1. DUTIES OF THE ADVISER. The Fund, pursuant to 3.1(c) of the Amended and
Restated Operating Agreement of the Fund (the "Operating Agreement"), hereby
employs the Adviser to act as investment adviser for and to manage the
investment and reinvestment of the assets of the Fund and to administer its
affairs for the period and on the terms set forth in this Agreement.
The Adviser hereby accepts such employment, and undertakes to afford to the
Fund the advice and assistance of the Adviser's organization in the choice of
investments and in the purchase and sale of securities for the Fund and to
furnish for the use of the Fund office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Fund
and for administering its affairs and to pay the salaries of officers of the
Fund who are members of the Adviser's organization. The Adviser shall for all
purposes herein be deemed to be an independent contractor and shall, except as
otherwise herein expressly provided or authorized, have no authority to act for
or represent the Fund in any way or otherwise be deemed an agent of the Fund.
The Adviser shall evaluate and select those equity securities which it
considers appropriate for contribution to the Fund in accordance with the Fund's
private placement memorandum. The Adviser shall provide the Fund with such
investment management and supervision as the Fund may from time to time consider
necessary for the proper supervision of the Fund. As investment adviser to the
Fund, the Adviser shall furnish continuously an investment program and shall
determine from time to time what securities and other investments shall be
acquired, disposed of or exchanged and what portion of the Fund's assets shall
be held uninvested, subject always to the applicable restrictions of the
Operating Agreement of the Fund, as from time to time amended. The Adviser shall
take, on behalf of the Fund, all actions which it deems necessary or desirable
to implement the investment policies of the Fund.
The Adviser shall find, evaluate, structure and monitor the Qualifying
Assets (other than Real Estate Assets) defined in the Operating Agreement, and
shall make arrangements for the borrowings to enable the Fund and its subsidiary
Belcrest Realty Corp. ("BRC") to acquire the Qualifying Assets. The Adviser
shall make all decisions regarding the Fund's investments, hedging transactions
and other investment strategies, subject always to the applicable restrictions
of the Operating Agreement, as from time to time amended. The Adviser shall
value all non-cash assets of the Fund in accordance with Article 7 of the
Operating Agreement. The value of the Fund's Qualifying Assets (other than Real
Estate Assets) will be determined in good faith by the Adviser, after
consideration of all relevant factors, data and information. The Adviser shall
arrange and supervise the Fund's credit facility and its borrowings thereunder.
The Adviser shall manage, supervise and monitor the redemption practices and
policies of the Fund as set forth in the Operating Agreement and the Fund's
private placement memorandum. The Adviser shall also provide such other
administrative services as the Fund may
request from time to time, including without limitation the computation of
distributions, the preparation of performance data and financial information,
the preparation of reports and other communications to Shareholders, and the
monitoring of compliance by the Fund with tax and regulatory requirements and
its credit facility, investment objective and investment restrictions.
The Adviser shall place all orders for the purchase or sale of portfolio
securities for the account of the Fund either directly with the issuer or with
brokers or dealers selected by the Adviser, and to that end the Adviser is
authorized as the agent of the Fund to give instructions to the custodian of the
Fund as to deliveries of securities and payments of cash for the account of the
Fund. In connection with the selection of such brokers or dealers and the
placing of such orders, the Adviser shall use its best efforts to seek to
execute security transactions at prices which are advantageous to the Fund and
(when a disclosed commission is being charged) at reasonably competitive
commission rates. In selecting brokers or dealers qualified to execute a
particular transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) to the Adviser and the Adviser is expressly
authorized to pay any broker or dealer who provides such brokerage and research
services a commission for executing a security transaction which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if the Adviser determines in good faith that such
amount of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or the overall responsibilities which the Adviser
and its affiliates have with respect to accounts over which they exercise
investment discretion. Subject to the requirement set forth in the second
sentence of this paragraph, the Adviser is authorized to consider, as a factor
in the selection of any broker or dealer with whom purchase or sale orders may
be placed, the fact that such broker or dealer has sold Shares of the Fund or
has sold or is selling shares of various investment companies sponsored by the
Adviser or its affiliates.
2. COMPENSATION OF THE ADVISER. For the services, payments and facilities
to be furnished hereunder by the Adviser, the Adviser shall be entitled to
receive from the Fund in respect of each month a monthly investment advisory and
administrative fee at the rate of 1/20th of 1% of the average daily gross
investment assets of the Fund, reduced by that portion of the monthly advisory
fee for such month payable by Tax-Managed Growth Portfolio which is attributable
to the value of the Fund's investment in Belvedere Capital Fund Company LLC (the
"Company"). The gross investment assets on any day means the value of all assets
of the Fund other than the Fund's investments in BRC minus the sum of the Fund's
liabilities other than the principal amount of money borrowed on such day. Such
compensation shall be paid monthly in arrears on the last business day of each
month. The value of the Fund's assets shall be computed daily in accordance with
the Operating Agreement. In case of initiation or termination of this Agreement
during any month with respect to the Fund, the fee for that month shall be based
on the number of calendar days during which it is in effect.
3. ALLOCATION OF CHARGES AND EXPENSES. It is understood that the Fund will
pay all expenses other than those expressly stated to be payable by the Adviser
hereunder, which expenses payable by the Fund shall include, without implied
limitation, (i) expenses of maintaining the Fund and continuing its existence,
(ii) commissions, fees and other expenses connected with the acquisition,
holding and disposition of securities and other investments, (iii) auditing,
accounting and legal expenses, (iv) taxes, interest and borrowing costs, (v)
governmental fees, (vi) expenses of offering, issue, sale, and redemption of
Fund Shares, (vii) expenses under federal and state securities laws and of
preparing and printing private placement memoranda and subscription documents
for such purposes and for distributing the same to investors, (viii) expenses of
reports, notices and other communications to investors, (ix) insurance expenses,
(x) fees, expenses and disbursements of custodians and subcustodians for all
services to the Fund (including without limitation safekeeping of funds,
securities and other investments, keeping of
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books, accounts and records, and calculation of asset values, book capital
account balances and tax capital account balances), (xi) fees, expenses and
disbursements of transfer agents, distribution disbursing agents, investor
servicing agents and registrars for all services to the Fund, (xii) expenses for
servicing the accounts of Shareholders, (xiii) compensation of the Adviser,
(xiv) expenses of soliciting Shareholder consents and holding meetings of
Shareholders, (xv) the commissions, fees, costs and expenses stated to be paid
or reimbursed by the Fund in the Fund's private placement memorandum as
supplemented from time to time, and (xvi) such non-recurring items as may arise,
including expenses incurred in connection with litigation, proceedings and
claims and the obligation of the Fund to indemnify persons pursuant to the
Operating Agreement or other contractual arrangements.
4. WAIVER OF PORTION OF FEE. The Adviser agrees to waive that portion of
the monthly investment advisory and administrative fee payable each month by the
Fund to the extent that such fee, together with the monthly distribution fee for
such month payable by the Fund to Xxxxx Xxxxx Distributors, Inc. exceeds 1/20th
of 1% of the average daily gross investment assets of the Fund (as defined
herein) reduced by that portion of the monthly advisory fee for such month
payable by Tax-Managed Growth Portfolio which is attributable to the Fund's
investment in the Company.
5. LIMITATION OF LIABILITY OF THE ADVISER. The services of the Adviser to
the Fund are not to be deemed to be exclusive, the Adviser being free to render
services to others and engage in other business activities. The Fund
acknowledges that the Adviser and its officers, employees, trustee, associates
and affiliates are entitled to the limitation of liability to the Fund and the
Shareholders and the indemnification from the Fund conferred upon them by the
Operating Agreement of the Fund. The Adviser shall not be liable for losses
sustained in the acquisition, holding or disposition of any security or other
investment.
6. DURATION AND AMENDMENT. This Agreement shall continue indefinitely
unless terminated or amended by the Adviser.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
BELCREST CAPITAL FUND LLC
By: XXXXX XXXXX MANAGEMENT - its Manager
By: /s/ Xxxxxx Xxxx
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BOSTON MANAGEMENT AND RESEARCH
By: /s/ Xxxx X. Xxxxxx
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