MANAGEMENT AGREEMENT
ITEM 25.2 EXHIBIT G
XXXXXXX XXXXX CREDIT STRATEGIES FUND
00 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Xxxxxxx, Xxxxxxxx 00000
May 15, 2009
Xxxxxxx Xxxxx Asset Management, L.P.
00 Xxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
00 Xxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxxxxx Sachs Credit Strategies Fund (the “Registrant”) is organized as a statutory trust under the
laws of the State of Delaware to engage in the business of an investment company. The shares of
the Registrant (“Shares”) may be divided into multiple series. As of the date of this Management
Agreement (the “Agreement”), the Registrant consists of only non-designated Shares (the “Fund”).
Annex A, however, may be amended from time to time to reflect future series (each also a “Fund” or
a “Series”). The Registrant has selected you to act as the investment adviser and administrator of
a Fund and to provide certain services, as more fully set forth below, and you are willing to act
as such investment adviser and administrator and to perform such services under the terms and
conditions hereinafter set forth. Accordingly, the Registrant agrees with you as follows:
1. Name of Registrant. The Registrant may use any name including or derived from the
name “Xxxxxxx Xxxxx” in connection with a Fund only for so long as this Agreement or any extension,
renewal or amendment hereof remains in effect, including any similar agreement with any
organization which shall have succeeded to your business as investment adviser or administrator.
Upon the termination of this Agreement, the Registrant (to the extent that it lawfully can) will
cause a Fund to cease to use such a name or any other name indicating that it is advised by or
otherwise connected with you or any organization which shall have so succeeded to your business.
2. Sub-Advisers. You may engage one or more investment advisers which are either
registered as such or specifically exempt from registration under the Investment Advisers Act of
1940, as amended, to act as sub-advisers to provide with respect to a Fund certain services set
forth in Paragraphs 3 and 6 hereof, all as shall be set forth in a written contract to which the
Registrant, on behalf of the Fund, and you shall be parties, which contract shall be subject to
approval by the vote of a majority of the Trustees who are not interested persons of you, the
sub-adviser, or of the Registrant, cast in person at a meeting called for the purpose of voting on
such approval and by the vote of a majority of the outstanding voting securities of the Fund and
otherwise consistent with the terms of the Investment Company Act of 1940 Act, as amended (the
“1940 Act”).
3. Management Services.
(a) You will regularly provide a Fund with investment research, advice and supervision
and will furnish continuously an investment program for the Fund consistent with the
investment objectives and policies of the Fund. You will determine from time to time what
securities shall be purchased for the Fund, what securities shall be held or sold by the
Fund, and what portion of the Fund’s assets shall be held uninvested as cash, subject always
to the provisions of the Registrant’s Declaration of Trust and By-Laws and of the 1940 Act,
and to the investment objectives, policies and restrictions of the Fund, as each of the same
shall be from time to time in effect, and subject, further, to such policies and
instructions as the Trustees of the Registrant may from time to time establish.
(b) Subject to the general supervision of the Trustees of the Registrant, you will
provide certain administrative services to the Fund. You will, to the extent such services
are not required to be performed by others pursuant to the custodian agreement (or the
transfer agency agreement to the extent that a person other than you is serving thereunder
as the Registrant’s transfer agent), (i) provide supervision of all aspects of the Fund’s
operations not referred to in paragraph (a) above; (ii) provide the Fund with personnel to
perform such executive, administrative and clerical services as are reasonably necessary to
provide effective administration of the Fund; (iii) arrange for, at the Registrant’s
expense, (a) the preparation for the Fund of all required tax returns, (b) the preparation
and submission of reports to existing shareholders and (c) the periodic updating of the
Fund’s prospectuses and statements of additional information and the preparation of reports
filed with the Securities and Exchange Commission and other regulatory authorities; (iv)
maintain all of the Fund’s records and (v) provide the Fund with adequate office space and
all necessary office equipment and services including telephone service, heat, utilities,
stationery supplies and similar items.
(c) You will also provide to the Registrant’s Trustees such periodic and special
reports as the Trustees may reasonably request. You shall for all purposes herein be deemed
to be an independent contractor and shall, except as otherwise expressly provided or
authorized, have no authority to act for or represent the Registrant or any Fund in any way
or otherwise be deemed an agent of the Registrant or any Fund.
(d) You will maintain all books and records with respect to the Fund’s securities
transactions required by sub-paragraphs (b)(5), (6), (9) and (10) and paragraph (f) of Rule
31a-1 under the 1940 Act (other than those records being maintained by the Fund’s custodian
or transfer agent) and preserve such records for the periods prescribed therefor by Rule
31a-2 of the 1940 Act. You will also provide to the Registrant’s Trustees such periodic and
special reports as the Board may reasonably request.
(e) You will notify the Registrant of any change in your membership within a reasonable
time after such change.
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(f) Your services hereunder are not deemed exclusive and you shall be free to render
similar services to others.
4. Allocation of Charges and Expenses. You will pay all costs incurred by you in
connection with the performance of your duties under Paragraph 3. You will pay the compensation
and expenses of all personnel of yours and will make available, without expense to any Fund, the
services of such of your partners, officers and employees as may duly be elected officers or
Trustees of the Registrant, subject to their individual consent to serve and to any limitations
imposed by law. You will not be required to pay any expenses of any Fund other than those
specifically allocated to you in this Paragraph 4. In particular, but without limiting the
generality of the foregoing, you will not be required to pay: (i) organization expenses of the
Fund; (ii) fees and expenses incurred by the Fund in connection with membership in investment
company organizations; (iii) brokers’ commissions; (iv) payment for portfolio pricing services to a
pricing agent, if any; (v) legal, auditing or accounting expenses (including an allocable portion
of the cost of your employees rendering legal and accounting services to the Fund); (vi) taxes or
governmental fees; (vii) the fees and expenses of the transfer agent of the Registrant; (viii) the
cost of preparing stock certificates or any other expenses, including clerical expenses of issue,
redemption or repurchase of Shares of the Fund; (ix) the expenses of and fees for registering or
qualifying Shares for sale and of maintaining the registration of the Fund and registering the
Registrant as a broker or a dealer; (x) the fees and expenses of Trustees of the Registrant who are
not affiliated with you; (xi) the cost of preparing and distributing reports and notices to
shareholders, the Securities and Exchange Commission and other regulatory authorities; (xii) the
fees or disbursements of custodians of the Fund’s assets, including expenses incurred in the
performance of any obligations enumerated by the Declaration of Trust or By-Laws of the Registrant
insofar as they govern agreements with any such custodian; or (xiii) litigation and indemnification
expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s
business. You shall not be required to pay expenses of activities which are primarily intended to
result in sales of Shares of the Fund.
5. Compensation of the Manager.
(a) For all services to be rendered and payments made as provided in Paragraphs 3 and 4
hereof, the Registrant on behalf of a Fund will pay you each month a fee at an annual rate
equal to the percentage of the average daily net assets of the Fund set forth with respect
to such Fund on Annex A. The “average daily net assets” of the Fund shall be determined on
the basis set forth in the Fund’s prospectus(es) or otherwise consistent with the 1940 Act
and the regulations promulgated thereunder.
(b) In addition to the foregoing, you may from time to time agree not to impose all or
a portion of your fee otherwise payable hereunder (in advance of the time such fee or
portion thereof would otherwise accrue) and/or undertake to pay or reimburse the Fund for
all or a portion of its expenses not otherwise required to be borne or reimbursed by you.
Any such fee reduction or undertaking may be discontinued or modified by you at any time.
6. Avoidance of Inconsistent Position. In connection with purchases or sales of
portfolio securities for the account of a Fund, neither you nor any of your partners, officers or
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employees will act as a principal, except as otherwise permitted by the 1940 Act. You or your
agent shall arrange for the placing of all orders for the purchase and sale of portfolio securities
for the Fund’s account with brokers or dealers (including Xxxxxxx, Sachs & Co. or an affiliate
thereof) selected by you. In the selection of such brokers or dealers (including Xxxxxxx, Xxxxx &
Co. or an affiliate thereof) and the placing of such orders, you are directed at all times to seek
for the Fund the most favorable execution and net price available. It is also understood that it
is desirable for the Fund that you have access to supplemental investment and market research and
security and economic analyses provided by brokers who may execute brokerage transactions at a
higher cost to the Fund than may result when allocating brokerage to other brokers on the basis of
seeking the most favorable price and efficient execution. Therefore, you are authorized to place
orders for the purchase and sale of securities for the Fund with such brokers, subject to review by
the Registrant’s Trustees from time to time with respect to the extent and continuation of this
practice. It is understood that the services provided by such brokers may be useful to you in
connection with your services to other clients. If any occasion should arise in which you give any
advice to your clients concerning the Shares of a Fund, you will act solely as investment counsel
for such clients and not in any way on behalf of any Fund. You may, on occasions when you deem the
purchase or sale of a security to be in the best interests of the Fund as well as your other
customers (including any other Series or any other investment company or advisory account for which
you or any of your affiliates acts as an investment adviser), aggregate, to the extent permitted by
applicable laws and regulations, the securities to be sold or purchased in order to obtain the best
net price and the most favorable execution. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the transaction, will be made by you in the
manner you consider to be the most equitable and consistent with your fiduciary obligations to the
Fund and to such other customers.
7. Limitation of Liability of Manager and Fund. You shall not be liable for any error
of judgment or mistake of law or for any loss suffered by a Fund in connection with the matters to
which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on your part in the performance of your duties or from reckless disregard by you of your
obligations and duties under this Agreement. Any person, even though also employed by you, who may
be or become an employee of and paid by the Registrant or the Fund shall be deemed, when acting
within the scope of his employment by the Fund, to be acting in such employment solely for the Fund
and not as your employee or agent. The Fund shall not be liable for any claims against any other
Series of the Registrant.
8. Duration and Termination of this Agreement. This Agreement shall remain in force
as to a Fund until June 30, 2010 and shall continue for periods of one year thereafter, but only so
long as such continuance is specifically approved at least annually (a) by the vote of a majority
of the Trustees who are not interested persons (as defined in the 0000 Xxx) of the Registrant and
have no financial interest in this Agreement, cast in person at a meeting called for the purpose of
voting on such approval and (b) by a vote of a majority of the Trustees of the Registrant or of a
majority of the outstanding voting securities of such Fund. The aforesaid requirement that
continuance of this Agreement be “specifically approved at least annually” shall be construed in a
manner consistent with the 1940 Act and the rules and regulations thereunder. This Agreement may,
on 60 days written notice to the other party, be terminated in its entirety or
as to a particular Fund at any time without the payment of any penalty, by the Trustees of the
Registrant, by vote of a majority of the outstanding voting securities of a Fund, or by you. This
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Agreement shall automatically terminate in the event of its assignment. In interpreting the
provisions of this Agreement, the definitions contained in Section 2(a) of the 1940 Act
(particularly the definitions of “interested person,” “assignment” and “majority of the outstanding
voting securities”), as from time to time amended, shall be applied, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission by any rule, regulation or
order.
9. Amendment of this Agreement. No provisions 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. No amendment
of this Agreement shall be effective as to a Fund until approved by vote of the holders of a
majority of the outstanding voting securities of such Fund and by a majority of the Trustees of the
Registrant, including a majority of the Trustees who are not interested persons (as defined in the
0000 Xxx) of the Registrant and have no financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such amendment. Notwithstanding the foregoing, this
Agreement may be amended at any time to add to a new Fund to Annex A provided such amendment is
approved by a majority of the Trustees of the Registrant, including a majority of the Trustees who
are not interested persons (as defined in the 0000 Xxx) of the Registrant and have no financial
interest in this Agreement. This paragraph does not apply to any agreement described in Paragraph
5(b) hereof, which shall be effective during the period you specify in a prospectus, sticker, or
other document made available to current or prospective shareholders.
10. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
11. 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. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
The name Xxxxxxx Xxxxx Credit Strategies Fund is the designation of the Trustees for the time
being under an amended and restated Declaration of Trust dated May 12, 2009, as amended from time
to time, and all persons dealing with the Trust or a Fund must look solely to the property of the
Trust or such Fund for the enforcement of any claims as none of the Trustees, officers, agents or
shareholders assumes any personal liability for obligations entered into on behalf of the Trust.
No Fund shall be liable for any claims against any other Series.
If you are in agreement with the foregoing, please sign the acceptance on the Registrant
counterpart of this letter and return such counterpart to the Registrant, whereupon this letter
shall become a binding contract.
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Yours very truly,
XXXXXXX SACHS CREDIT STRATEGIES FUND
Attest:
|
/s/ Xxxxxx X. Xxxxxx | By: | /s/ Xxxxx X. Xxxxxxx | |||
| Xxxxxx X. Xxxxxx | Xxxxx X. Xxxxxxx | |||||
| Vice President | Secretary |
The foregoing Agreement is hereby accepted as of the date thereof.
XXXXXXX XXXXX ASSET MANAGEMENT, L.P.
Attest:
|
/s/ Xxxxxx X. Xxxxxx | By: | /s/ Xxxxx X. XxXxxxxx | |||
| Xxxxxx X. Xxxxxx | Xxxxx X. XxXxxxxx | |||||
| Vice President | Managing Director |
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Amended Annex A
The compensation payable under Paragraph 5 of this Agreement between Xxxxxxx Sachs Credit
Strategies Fund and Xxxxxxx Xxxxx Asset Management, L.P. shall be as follows:
| Fund | Annual Rate | |
Xxxxxxx Sachs Credit Strategies Fund
|
1.00% on first $1 billion | |
| 0.90% over $1 billion up to $2 billion | ||
| 0.86% over $2 billion up to $5 billion | ||
| 0.84% over $5 billion up to $8 billion | ||
| 0.82% over $8 billion |
