FORM OF INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT made as of ___________, 2002 between
TORREY INTERNATIONAL STRATEGY PARTNERS, LLC, a Delaware limited liability
company (the "Fund"), and TORREY ASSOCIATES LLC (the "Advisor"), a Delaware
limited liability company registered as an investment advisor under the
Investment Advisers Act of 1940, as amended.
WHEREAS, the Fund is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as a closed-end management investment company
and desires to retain the Advisor as investment advisor to furnish certain
investment advisory and portfolio management services to the Fund, and the
Advisor is willing to furnish these services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints the Advisor as investment
advisor of the Fund for the
period and on the terms set forth in this Agreement. The Advisor accepts this
appointment and agrees to render the services herein set forth, for the
compensation herein described.
2. Duties as Investment Advisor.
(a) Subject to the supervision of the Fund's Board of Managers (the
"Board"), the Advisor will have full discretion and authority (i) to manage the
assets and liabilities of the Fund and (ii) to manage the day-to-day business
and affairs of the Fund. In furtherance of and subject to the foregoing, the
Advisor will have full power and authority on behalf of the Fund, among other
matters:
(1) to purchase, sell, exchange, trade and otherwise deal in and
with securities and other property of the Fund and to loan
securities of the Fund;
(2) to do any and all acts and exercise all rights with respect
to the Fund's interest in any person, firm, corporation,
partnership or other entity, including, without limitation,
voting interests of the Portfolio Funds (as defined in the
Fund's Private Placement Memorandum (the "Memorandum"));
(3) to enter into agreements with the Portfolio Funds
irrevocably to forego the Fund's right to vote its interests
or shares of the Portfolio Funds;
(4) to enter into agreements with the Portfolio Funds that
provide for, among other things, the indemnification by the
Fund of the Portfolio Funds and the Portfolio Managers (as
defined in the Memorandum) to the same or different extent
as provided for in respect of the Advisor, and to terminate
such agreements;
(5) to open, maintain and close accounts with brokers and
dealers, to make all decisions relating to the manner,
method and timing of securities and other investment
transactions, to select and place orders with brokers,
dealers or other financial intermediaries for the execution,
clearance or settlement of any transactions on behalf of the
Fund on such terms as the Advisor considers appropriate, and
to grant limited discretionary authorization to such persons
with respect to price, time and other terms of investment
and trading transactions, subject to Paragraph 2(b) hereof;
(6) to borrow from banks or other financial institutions and to
pledge Fund assets as collateral therefor, to trade on
margin, to exercise or refrain from exercising all rights
regarding the Fund's investments, and to instruct custodians
regarding the settlement of transactions, the disbursement
of payments to the Fund's investors (the "Members") with
respect to repurchases of interests in the Fund
("Interests") and the payment of Fund expenses, including
those relating to the organization and registration of the
Fund;
(7) to call and conduct meetings of Members at the Fund's
principal office or elsewhere as it may determine and to
assist the Board in calling and conducting meetings of the
Board;
(8) to engage and terminate such attorneys, accountants and
other professional advisors and consultants as the Advisor
may deem necessary or advisable in connection with the
affairs of the Fund or as may be directed by the Board;
(9) to engage and terminate the services of persons other than
the Sub-Advisors (as defined in the Memorandum)(the
engagement of which shall be subject to Paragraph 2(a)(13)
hereof) to assist the Advisor in providing, or to provide
under the Advisor's control and supervision, advice and
management to the Fund at the expense of the Advisor and to
terminate such services;
(10) as directed by the Board, to commence, defend and conclude
any action, suit, investigation or other proceeding that
pertains to the Fund or any assets of the Fund;
(11) if directed by the Board, to arrange for the purchase of (A)
one or more "key man" insurance policies on the life of any
principal of a member of the Advisor, the benefits of which
are payable to the Fund, or (B) any insurance covering the
potential liabilities of the Fund or relating to the
performance of the Board or the Advisor, or any of their
principals, directors, officers, members, employees and
agents;
(12) to execute, deliver and perform such contracts, agreements
and other undertakings, and to engage in such activities and
transactions as are, in the opinion of the Advisor,
necessary and appropriate for the conduct of the business of
the Fund without the act, vote or approval of any other
Members or person; and
(13) (A) to direct the formulation of investment policies and
strategies for the Fund using a multi-asset and
multi-manager strategy whereby some or all of the Fund's
assets may be committed from time to time by the Advisor to
the discretionary management of one or more Sub-Advisors,
the selection of which shall be subject to the approval of a
majority (as defined in the 0000 Xxx) of the Fund's
outstanding voting securities, unless the Fund receives an
exemption from the provisions of the 1940 Act requiring such
approval, (B) to enter into agreements with the Sub-Advisors
that provide for, among other things, the indemnification by
the Fund of the Sub-Advisors to the same or different extent
as provided for in respect of the Advisor, and to terminate
such agreements, (C) to authorize the payment of fees and
allocations of profits to Sub-Advisors pursuant to their
respective governing documents and any rebates or reductions
of such fees or allocations which shall be for the benefit
of the Fund and (D) to identify appropriate Sub-Advisors,
assess the most appropriate investment vehicles (limited
partnerships, limited liability companies, separate managed
accounts or other investment vehicles (pooled or otherwise))
that invest or trade in securities, and determine the assets
to be committed to each Sub-Advisor and invested through the
Sub-Advisor, which investments shall be subject in each case
to the terms and conditions of the respective governing
documents used by the Sub-Advisor.
(b) The Advisor, in its discretion, may, directly or indirectly
(through investment in Portfolio Funds or with Sub-Advisors), use brokers who
provide the Fund (or Portfolio Funds or Sub-Advisors) with research, analysis,
advice and similar services to execute portfolio transactions on behalf of the
Fund (or Portfolio Funds), and the Fund (or Portfolio Funds or Sub-Advisors) may
pay to those brokers in return for brokerage and research services a higher
commission than may be charged by other brokers, subject to the Advisor's (or
Portfolio Manager's or Sub-Advisor's) good faith determination that such
commission is reasonable in terms either of the particular transaction or of the
overall responsibility of the Advisor (or Sub-Advisor) to the Fund (or of the
Portfolio Manager to the Portfolio Fund) and its other clients and that the
total commissions paid by the Fund (or Portfolio Funds) will be reasonable in
relation to the benefits to the Fund (or Portfolio Funds or Sub-Advisors) over
the long term. Whenever the Advisor, a Sub-Advisor or a Portfolio Manager
simultaneously places orders to purchase or sell the same security on behalf of
the Fund (or Portfolio Fund) and one or more other accounts advised by the
Advisor, Sub-Advisor or Portfolio Manager, such orders will be allocated as to
price and amount among all such accounts in a manner believed to be equitable to
each account. The Fund recognizes that in some cases this procedure may
adversely affect the results obtained for the Fund.
3. Services Not Exclusive. The services furnished by the Advisor
hereunder are not to be deemed exclusive and the Advisor shall be free to
furnish similar services to others. Nothing in this Agreement shall limit or
restrict the right of any director, officer or employee of the Advisor or its
affiliates, who also may be a Director, officer or employee of the Fund, to
engage in any other business or to devote his or her time and attention in part
to the management or other aspects of any other business, whether of a similar
or dissimilar nature.
4. Expenses.
(a) During the term of this Agreement, the Fund will bear all expenses
incurred in the business of the Fund, other than those not specifically assumed
by the Advisor and other service providers pursuant to their agreements with the
Fund. Expenses to be borne by the Fund will include, but are not limited to, the
following:
(1) all costs and expenses directly related to portfolio
transactions and positions for the Fund's account,
including, but not limited to, brokerage commissions,
research fees (including research related travel), interest
and commitment fees on loans and debit balances, borrowing
charges on securities sold short, dividends on securities
sold short but not yet purchased, custodial fees,
shareholder servicing fees, margin fees, transfer taxes and
premiums and taxes withheld on foreign dividends, and
expenses from investments in Portfolio Funds;
(2) all costs and expenses associated with the organization,
operation and registration of the Fund, certain offering
costs and the costs of compliance with any applicable
Federal or state laws;
(3) the costs and expenses of holding any meetings of any
Members that are regularly scheduled, permitted or required
to be held under the terms of the Fund's Limited Liability
Company Agreement (the "LLC Agreement"), the 1940 Act or
other applicable law;
(4) the fees and disbursements of any attorneys, accountants,
auditors and other consultants and professionals engaged on
behalf of the Fund;
(5) the costs of a fidelity bond and any liability or other
insurance obtained on behalf of the Fund, the Advisor or its
affiliates, or the Board;
(6) all costs and expenses associated with the organization of
the Portfolio Funds managed by Sub-Advisors and with the
selection of Portfolio Managers and Portfolio Funds,
including due diligence and travel-related expenses;
(7) all costs and expenses of preparing, setting in type,
printing and distributing reports and other communications
to Members;
(8) all expenses of computing the Fund's net asset value,
including any equipment or services obtained for the purpose
of valuing the Fund's investment portfolio, including
appraisal and valuation services provided by third parties;
(9) all charges for equipment or services used for
communications between the Fund and any custodian, or other
agent engaged by the Fund;
(10) the fees of the Fund's administrator and custodian and other
persons providing administrative services to the Fund; and
(11) such other types of expenses as may be approved from time to
time by the Board.
(b) The payment or assumption by the Advisor of any expenses of the
Fund that the Advisor is not required by this Agreement to pay or assume shall
not obligate the Advisor to pay or assume the same or any similar expense of the
Fund on any subsequent occasion.
5. Compensation. As full compensation for the services provided to the
Fund and the expenses assumed by the Advisor under this Agreement, the Advisor
shall receive from the Fund a quarterly management fee (the "Management Fee") at
the annual rate of 2.0% of the Fund's net assets. The Management Fee is due and
payable quarterly in arrears within 10 business days after the end of the
relevant quarter. Net assets means the total value of all assets under
management of a Fund, less all accrued debts, liabilities and obligations of
that Fund, calculated before giving effect to any repurchases of Interests. The
Management Fee is computed based on the net assets of the Fund as of the end of
business on the last business day of each quarter. The Management Fee is charged
in each fiscal period to the capital accounts of all Members in proportion to
their capital accounts at the beginning of such fiscal period.
6. Limitation of Liability of the Advisor. The Advisor shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund or any Members in connection with the matters to which this Agreement
relates, except to the extent that such a loss results 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 obligations and duties under this
Agreement. Any person, even though also an officer, director, employee, or agent
of the Advisor or its affiliates, who may be or become an officer, Director,
employee or agent of the Fund, shall be deemed, when rendering services to the
Fund or acting with respect to any business of the Fund, to be rendering such
service to or acting solely for the Fund and not as an officer, director,
employee, or agent or one under the control or direction of the Advisor even
though compensated by it.
7. Indemnification.
(a) The Fund will indemnify the Advisor and its affiliates, and each of
their members, directors, officers and employees and any of their affiliated
persons, executors, heirs, assigns, successors or other legal representatives
(each an "Indemnified Person") against any and all costs, losses, claims,
damages or liabilities, joint or several, including, without limitation,
reasonable attorneys' fees and disbursements, resulting in any way from the
performance or non-performance of any Indemnified Person's duties in respect of
the Fund, except those resulting from the willful malfeasance, bad faith or
gross negligence of an Indemnified Person or the Indemnified Person's reckless
disregard of such duties and, in the case of criminal proceedings, unless such
Indemnified Person had reasonable cause to believe its actions unlawful
(collectively, "disabling conduct"). Indemnification shall be made following:
(i) a final decision on the merits by a court or other body before whom the
proceeding was brought that the Indemnified Person was not liable by reason of
disabling conduct or (ii) a reasonable determination, based upon a review of the
facts and reached by (A) the vote of a majority of the Board members who are not
parties to the proceeding or (B) legal counsel selected by a vote of a majority
of the Board in a written advice, that the Indemnified Person is entitled to
indemnification hereunder. The Fund shall advance to an Indemnified Person
reasonable attorneys' fees and other costs and expenses incurred in connection
with defense of any action or proceeding arising out of such performance or
non-performance. The Advisor agrees, and each other Indemnified Person will be
required to agree as a condition to any such advance, that if one of the
foregoing parties receives any such advance, the party will reimburse the Fund
for such fees, costs and expenses to the extent that it shall be determined that
the party was not entitled to indemnification under this Paragraph 7. The rights
of indemnification provided hereunder shall not be exclusive of or affect any
other rights to which any person may be entitled by contract or otherwise under
law.
(b) Notwithstanding any of the foregoing, the provisions of this
Paragraph 7 shall not be construed so as to relieve the Indemnified Person of,
or provide indemnification with respect to, any liability (including liability
under Federal securities laws, which, under certain circumstances, impose
liability even on persons who act in good faith) to the extent (but only to the
extent) that such liability may not be waived, limited or modified under
applicable law or that such indemnification would be in violation of applicable
law, but shall be construed so as to effectuate the provisions of this Paragraph
7 to the fullest extent permitted by law. The provisions of this Paragraph 7
shall survive the termination or cancellation of this Agreement.
8. Duration and Termination.
(a) This Agreement will become effective on the date the Fund commences
investment operations, provided that this Agreement will not take effect unless
it has first been approved (i) by a vote of a majority of those Board members
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 (ii) by vote of a majority of the outstanding voting securities of the Fund.
(b) Unless sooner terminated as provided herein, this Agreement shall
continue in effect for two years from the date the Fund commences investment
operations. Thereafter, if not terminated, this Agreement shall continue
automatically for successive one-year periods, provided that such continuance is
specifically approved at least annually (i) by a vote of a majority of those
Board members 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 (ii) by the Board or by vote of a majority of the outstanding
voting securities of the Fund.
(c) Notwithstanding the foregoing, this Agreement may be terminated at
any time, without the payment of any penalty, by vote of the Board or by a vote
of a majority of the Fund's outstanding voting securities on 60 days' written
notice to the Advisor or by the Advisor at any time, without the payment of any
penalty, on 60 days' written notice to the Fund. This Agreement will
automatically terminate in the event of its assignment.
9. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally; however, the provisions of
this Agreement may be changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.
10. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of New York, without giving effect to the conflicts of
laws principles thereof, and in accordance with the 1940 Act. To the extent that
the applicable laws of the State of New York conflict with the applicable
provisions of the 1940 Act, the latter shall control.
11. Consent to Jurisdiction. Any action or proceeding seeking to
enforce any provision of, or based on any right arising out of, this Agreement
may be brought against the Fund in the courts of the State of New York, County
of New York, or, if the Advisor has or can acquire jurisdiction, in the United
States District Court for the Southern District of New York, and the Fund hereby
consents to the jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue laid
therein. Process in any action or proceeding referred to in the preceding
sentence may be served on the Fund anywhere in the world.
12. 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 upon and shall inure to the
benefit of the parties hereto and their respective successors. As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"affiliated person," "interested person," "assignment," "broker," "investment
advisor," "national securities exchange," "sell" and "security" shall have the
same meaning as such terms have in the 1940 Act, subject to such exemption as
may be granted by the Securities and Exchange Commission by any rule, regulation
or order. Where the effect of a requirement of the 1940 Act reflected in any
provision of this contract is relaxed by a rule, regulation or order of the
Securities and Exchange Commission, whether of special or general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.
TORREY INTERNATIONAL STRATEGY PARTNERS, LLC
By:_______________________________________
Name:
Title:
TORREY ASSOCIATES, LLC
By:_______________________________________
Name:
Title:
80350.0024 #328846
