RIVUS BOND FUND INVESTMENT ADVISORY AGREEMENT
Exhibit (2)(g)
AGREEMENT, made by and between RIVUS BOND FUND, a Delaware statutory trust (hereinafter called
the “Fund”), and MBIA Capital Management Corp., a Delaware corporation (hereinafter called the
“Investment Adviser”).
W I T N E S S E T H:
WHEREAS, the Fund has been organized and operates as an investment company registered under
the Investment Company Act of 1940 (the “1940 Act”) and engages in the business of investing and
reinvesting its assets in securities, and the Investment Adviser is a registered Investment Adviser
under the Investment Advisers Act of 1940 (the “Advisers Act”) and engages in the business of
providing investment management services; and
WHEREAS, the Fund has selected the Investment Adviser to serve as the investment adviser for
the Fund; and
NOW, THEREFORE, in consideration of the mutual covenants herein contained, and each of the
parties hereto intending to be legally bound, it is agreed as follows:
1. The Fund hereby employs the Investment Adviser to manage the investment and reinvestment of
the Fund’s assets and to administer its affairs, subject to the direction of the Board of Directors
and officers of the Fund for the period and on the terms hereinafter set forth. The Investment
Adviser hereby accepts such employment and agrees during such period to render the services and
assume the obligations herein set forth for the compensation herein provided. The Investment
Adviser shall, for all purposes herein, be deemed to be an independent contractor, and shall,
unless otherwise expressly provided and authorized, have no authority to act for or to represent
the Fund in any way, or in any way be deemed an
agent of the Fund. The Investment Adviser shall regularly make decisions as to what
securities
-1-
to purchase and sell on behalf of the Fund and shall record and implement such decisions
and shall furnish the Board of Directors of the Fund with such information and reports regarding
the Fund’s investments as the Investment Adviser deems appropriate or as the Directors of the Fund
may reasonably request. Subject to compliance with the requirements of the 1940 Act, the
Investment Adviser may retain as a sub-adviser to the Fund, at the Investment Adviser’s own
expense, any investment adviser registered under the Advisers Act.
2. The Fund shall conduct its own business and affairs and shall bear the expenses and
salaries necessary and incidental thereto including, but not in limitation of the foregoing, the
costs incurred in: the maintenance of its corporate existence; the maintenance of its own books,
records and procedures; dealing with its own shareholders; the payment of dividends; transfer of
stock, including issuance, redemption and repurchase of shares; preparation of share certificates;
reports and notices to shareholders; calling and holding of shareholders’ meetings; miscellaneous
office expenses; brokerage commissions; custodian fees; legal and accounting fees; and taxes.
Officers and employees of the Investment Adviser may be trustees, directors, officers and employees
of the funds of which the Investment Adviser serves as investment adviser. Officers and employees
of the Investment Adviser who are directors, officers and/or employees of the Fund shall not
receive any compensation from the Fund for acting in such dual capacity.
In the conduct of the respective businesses of the parties hereto and in the performance of
this Agreement, the Fund and Investment Adviser may share facilities common to each, with
appropriate proration of expenses between them.
3. (a) The Investment Adviser shall place and execute Fund orders for the purchase and sale of
portfolio securities with broker-dealers. Subject to the primary objective of obtaining the best
available prices and execution, the Investment Adviser will place
-2-
orders for the purchase and sale
of portfolio securities for the Fund with such broker-dealers as it may select from time to time,
including brokers who provide statistical, factual and financial information and services to the
Fund, to the Investment Adviser, or to any other fund for which the Investment Adviser provides
investment advisory services. Broker-dealers who sell shares of the funds of which the Investment
Adviser is investment adviser shall only receive orders for the purchase or sale of portfolio
securities to the extent that the placing of such orders is in compliance with the Rules of the
Securities and Exchange Commission and National Association of Securities Dealers, Inc.
(b) Notwithstanding the provisions of subparagraph (a) above and subject to such policies and
procedures as may be adopted by the Board of Directors and officers of the Fund, the Investment
Adviser is authorized to pay a member of an exchange, broker or dealer an amount of commission for
effecting a securities transaction in excess of the amount of commission another member of an
exchange, broker or dealer would have charged for effecting that transaction in such instances
where the Investment Adviser has determined in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services provided by such member,
broker or dealer, viewed in terms of either that particular transaction or the Investment Adviser’s
overall responsibilities with respect to the Fund and to other funds for which the Investment
Adviser exercises investment discretion.
4. As compensation for the services to be rendered to the Fund by the Investment Adviser under
the provisions of this Agreement, the Fund shall pay to the Investment
Adviser from the Fund’s assets each month an investment advisory fee at the annualized rate of
0.50% of the first $100,000,000 of the net asset value of the Fund on the last day of such month
and 0.40% of the net asset value of the Fund on the last day of such month in excess of
$100,000,000. The net asset value of the Fund shall be defined as the total assets of the Fund,
-3-
less its liabilities, and shall be determined in accordance with any instructions of the Board of
Directors.
If this Agreement shall become effective subsequent to the first day of the month, or shall
terminate before the last day of the month, the Investment Adviser’s compensation for such
fraction of the month shall be determined by applying the foregoing percentages to the average of
the weekly net asset values of the Fund during such fraction of a month (or if none, to the net
asset value of the Fund as calculated on the last day of the preceding month on which the New York
Stock Exchange was open for trading) and in the proportion that such fraction of a month bears to
the entire month.
If this Agreement is terminated prior to the end of any calendar month, the management fee
shall be prorated for the portion of any month in which this Agreement is in effect according to
the proportion which the number of calendar days during which the Agreement is in effect bears to
the number of calendar days in the month.
5. The services to be rendered by the Investment Adviser to the Fund under the provisions of
this Agreement are not to be deemed to be exclusive, and the Investment Adviser shall be free to
render similar or different services to others so long as its ability to render the services
provided for in this Agreement shall not be impaired thereby.
6. The Investment Adviser, its officers, employees, and agents may engage in other businesses,
may render investment advisory services to other investment companies, or
to any other corporation, association, firm or individual, and may render underwriting
services to the Fund or to any other investment company, corporation, association, firm or
individual.
7. In the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard
of the performance of duties of the Investment Adviser to the Fund, the Investment Adviser shall
not be subject to liabilities to the Fund or to any shareholder of the
-4-
Fund for any action or
omission in the course of, or connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security, or otherwise.
8. This Agreement shall be executed and become effective as of the date written below. The
Agreement will continue in effect for an initial term of two years from the Effective Date (defined
below) and may continue thereafter from year to year if specifically approved at least annually by
the “vote of a majority of the outstanding voting securities” of the Fund or by the Board and, in
either event, by the vote of a majority of the Directors who are not parties to the Agreement or
interested persons of any such party, cast in person at a meeting called for such purpose. No
amendment to this Agreement shall be effective unless the terms thereof have been approved by the
vote of a majority of Directors of the Fund who are not parties to the Agreement or interested
persons of any such party, 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 a penalty, on sixty days’ written notice to the Investment Adviser of the
Fund’s intention to do so, pursuant to action by the Board of Directors of the Fund or pursuant to
a vote of a majority of the outstanding voting securities of the Fund. The Investment Adviser may
terminate this Agreement at any time, without the payment of penalty on sixty days’ written notice
to the Fund of its intention to do so. Upon
termination of this Agreement, the obligations of all the parties hereunder shall cease and
terminate as of the date of such termination, except for any obligation to respond for a breach of
this Agreement committed prior to such termination, and except for the obligation of the Fund to
pay to the Investment Adviser the fee provided in Paragraph 4 hereof, prorated to the date of
termination. This Agreement shall automatically terminate in the event of its assignment.
-5-
9. This Agreement shall extend to and bind the heirs, executors, administrators and successors
of the parties hereto.
10. For the purposes of this Agreement, the terms “vote of a majority of the outstanding
voting securities”; “interested persons”; and “assignment” shall have the meaning defined in the
1940 Act.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed on their behalf by
their respective officers thereunto duly authorized all as of October 31, 2005 (the “Effective
Date”) and as amended and restated as of June 30, 2006.
| Rivus Bond Fund |
||||
| By: | /s/Xxxxxxxx Xxxxx | |||
| Xxxxxxxx Xxxxx | ||||
| President | ||||
| MBIA Capital Management Corp. |
||||
| By: | /s/ Xxxxxxxx Xxxxx | |||
| Xxxxxxxx Xxxxx | ||||
| President | ||||
-6-
