Exhibit 99.2G
Exhibit G
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, made as of the ___ day of June, 2005, by and between THE
XXXXXXXX MULTI-STRATEGY TRUST, a Delaware statutory trust (the "Trust"), and
XXXXXXXX & COMPANY INVESTMENT ADVISER LLC, a Delaware limited liability
company (the "Investment Adviser").
W I T N E S S E T H:
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WHEREAS, the Trust has been established as a statutory trust under the
Delaware Statutory Trust Act (the "Delaware Act") to conduct, operate and
carry on the business of a closed-end, non-diversified management investment
company registered under the 1940 Act, as amended (the "1940 Act");
WHEREAS, the Trust is more fully described in the Confidential Private
Placement Memorandum dated [ ] 2005, prepared in connection with the placement
of shares in the Trust, as may be supplemented or amended from time to time
(the "Offering Memorandum") (capitalized terms used herein but not defined
have or will have the meanings ascribed to them in the Offering Memorandum);
WHEREAS, the Investment Adviser is engaged principally in rendering
management and investment advisory services and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Advisers
Act");
WHEREAS, the Trust desires to retain the Investment Adviser to provide
management and investment advisory services to the Trust in the manner and on
the terms hereinafter set forth; and
WHEREAS, the Investment Adviser is willing to provide management and
investment advisory services to the Trust on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and the covenants
hereinafter contained, the Trust and the Investment Adviser hereby agree as
follows:
1. DUTIES OF THE INVESTMENT ADVISER
(a) The Trust hereby employs the Investment Adviser to act as a manager
and investment adviser of the Trust and to furnish, or arrange for the
furnishing of, the management and investment advisory services described
below, subject to the policies of, review by and overall control of the Board
of Trustees of the Trust, for the period and on the terms and conditions set
forth in this Agreement. Additionally, the Investment Adviser will provide
certain administrative, transfer agency and investor services to the Trust.
The Investment Adviser hereby accepts such employment and agrees during such
period, at its own expense, to render, or arrange for the rendering of, such
services and to assume the obligations herein set forth for the compensation
provided for herein. The Investment Adviser, its affiliates, or any entity
performing services for the Trust on behalf of the Investment Adviser for all
purposes herein shall be deemed to be independent contractors and, unless
otherwise expressly provided herein or
authorized, shall have no authority to act for or represent the Trust in any
way or otherwise be deemed agents of the Trust.
(b) Management and Administrative Services. The Investment Adviser shall
perform, or arrange for the performance of, the management and administrative
services necessary for the operation of the Trust, including administering
Shareholder accounts and handling Shareholder relations. The Investment
Adviser shall provide the Trust with office space, facilities, equipment and
necessary personnel and such other services as the Investment Adviser, subject
to review by the Board of Trustees, from time to time shall determine to be
necessary or useful to perform its obligations under this Agreement.
Additionally, with regard to administrative services, the Investment Adviser
shall reconcile cash and investment balances; calculate contractual expenses,
including management fees and performance fees; determine net income; arrange
for the computation of the Trust's net asset value, prepare the Trust's
Statement of Assets and Liabilities and Statement of Operations; prepare and
file the Trust's annual and semi-annual reports with the Securities and
Exchange Commission; prepare and file certain federal and state tax returns
for the Trust; maintain the register of Shareholders, including any transfer
or repurchases of Shares; and allocate income, expenses, gains and losses to
the Shareholders. The Investment Adviser, also on behalf of the Trust, shall
conduct relations with custodians, depositories, transfer agents, pricing
agents, dividend disbursing agents, other Shareholder servicing agents,
accountants, attorneys, underwriters, brokers and dealers, corporate
fiduciaries, insurers, banks and such other persons in any such other capacity
deemed to be necessary or desirable. The Investment Adviser generally shall
monitor the Trust's compliance with investment policies and restrictions as
set forth in filings made by the Trust under the federal securities laws. The
Investment Adviser shall make reports to the Board of Trustees of its
performance of obligations hereunder and furnish advice and recommendations
with respect to such other aspects of the business and affairs of the Trust as
it shall determine to be desirable.
(c) Investment Advisory Services. The Investment Adviser shall provide
to, or arrange for the provision to, the Trust such investment research,
advice and supervision as the Trust from time to time may consider necessary
for the proper supervision of the assets of the Trust, shall furnish
continuously an investment program for the Trust and shall determine from time
to time which securities or other instruments shall be purchased, sold or
exchanged and what portion of the assets of the Trust shall be held in cash or
in the various securities, options, futures, and/or options on futures or
other instruments in which the Trust invests, subject always to the
restrictions of the Agreement and Declaration of Trust and the Bylaws of the
Trust, as amended from time to time, the provisions of the 1940 Act and the
statements relating to the Trust's investment objectives, investment policies
and investment restrictions as the same are set forth in the Offering
Memorandum and the filings made by the Trust under the federal securities
laws. The Investment Adviser shall make decisions for the Trust as to the
manner in which voting rights, rights to consent to corporate action and any
other rights pertaining to the Trust's portfolio securities shall be
exercised. Should the Board of Trustees at any time, however, make any
definite determination as to investment policy and notify the Investment
Adviser thereof in writing, the Investment Adviser shall be bound by such
determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. The Investment
Adviser shall take, on behalf of the Trust, all actions which it deems
necessary to implement the investment policies determined as provided above,
and in particular to place all
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orders for the purchase or sale of portfolio securities for the Trust's
account with brokers or dealers selected by it, and to that end, the
Investment Adviser is authorized as the agent of the Trust to give
instructions to the custodian of the Trust as to deliveries of securities and
payments of cash for the account of the Trust.
(d) The Investment Adviser may cause the Trust to pay a broker or dealer
that provides brokerage and research services to the Investment Adviser an
amount of commission for effecting a transaction in excess of the amount of
commission that another broker or dealer would have charged for effecting that
transaction, provided, that such services are consistent with Section 28(e) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and such
transactions are otherwise consistent with the Investment Adviser's duty to
obtain "best execution." These brokerage and research services may assist the
Investment Adviser in rendering services to other clients or accounts.
Notwithstanding the foregoing, however, the Investment Adviser may receive
research and research-related services and products through arrangements in
fixed price underwritings without regard to the "safe harbor" provided by
Section 28(e) of the Exchange Act, provided that the Investment Adviser
believes such arrangements to be in the best interests of the Trust.
(e) Sub-Advisers. In carrying out its responsibilities hereunder, the
Investment Adviser may employ, retain or otherwise avail itself of the
services of other persons or entities including without limitation, affiliates
of the Investment Adviser, on such terms as the Investment Adviser shall
determine to be necessary, desirable or appropriate. However, if the
Investment Adviser chooses to retain or avail itself of the services of
another person or entity to manage assets of the Trust, such other person or
entity must be (i) retained at the Investment Adviser's own cost and expense,
and (ii) retained subject to the requirements of Section 15 of the 1940 Act.
Retention of one or more sub-advisers, or the employment or retention of other
persons or entities to perform services, shall in no way reduce the
responsibilities or obligations of the Investment Adviser under this Agreement
and the Investment Adviser shall be responsible for all acts and omissions of
such sub-advisers, or other persons or entities, in connection with the
performance of the Investment Adviser's duties hereunder.
2. ALLOCATION OF CHARGES AND EXPENSES
(a) The Investment Adviser. The Investment Adviser shall provide the
staff and personnel necessary to perform its obligations under this Agreement,
shall assume and pay or cause to be paid all expenses incurred in connection
with the maintenance of such staff and personnel, and, at its own expense,
shall provide the office space, facilities, equipment and necessary personnel
which it is obligated to provide under Section 1 hereof. The Investment
Adviser shall pay, or cause affiliates to pay, the compensation of all
officers of the Trust and all Trustees of the Trust who are affiliated persons
of the Investment Adviser or any sub-adviser, or an affiliate of the
Investment Adviser or any sub-adviser.
(b) The Trust. The Trust shall pay the initial and ongoing offering costs
("Offering Costs") of the Trust as incurred, subject to an annual cap of 0.75%
of the Trust's average month-end net assets. Any Offering Costs incurred in
excess of the aforementioned annual cap will initially be paid by the
Investment Adviser; provided, however, that the Trust will reimburse the
Offering Costs paid by the Adviser at such time, if any, as the Trust is able
to do so within the
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limit of the aforementioned cap. Such Offering Costs include, without
limitation: taxes, expenses for legal and auditing services, costs of
preparing, printing and mailing proxies, listing fees, stock certificates,
Shareholder reports and prospectuses, charges of the custodian, any
sub-custodian and transfer agent, dividend disbursing agent and registrar,
charges of any auction agent and broker dealers in connection with preferred
stock of the Trust, expenses of portfolio transactions, Securities and
Exchange Commission fees, expenses of registering the shares of common stock
and preferred stock under federal, state and foreign laws, fees and actual
out-of-pocket expenses of Trustees who are not affiliated persons of the
Investment Adviser or any sub-adviser, or of an affiliate of the Investment
Adviser or any sub-adviser, accounting and pricing costs (including the daily
calculation of the net asset value), insurance, interest, brokerage costs,
litigation and other extraordinary or non-recurring expenses, mailing, and
other expenses properly payable by the Trust. It also is understood that if
the Investment Adviser or any of its affiliates provide accounting services to
the Trust, the Trust will reimburse the Investment Adviser and its affiliates
for their costs in providing such accounting services to the Trust.
3. COMPENSATION OF THE INVESTMENT ADVISER
(a) Management Fee. For the services rendered, the facilities furnished
and the expenses assumed by the Investment Adviser, the Trust shall pay to the
Investment Adviser at the end of each calendar month a monthly management fee
at an annual rate of 2% of the Trust's average month-end net assets prior to
any accrual for or payment of any performance fee for the current period
("Management Fee"). The Management Fee shall be computed based on the Trust's
net assets (calculated by determining the total value of all assets of the
Trust, less an amount equal to all accrued debts, liabilities and obligations)
as of the close of business on the last business day of each month, after
adjustment for any subscriptions made at the beginning of that month. The
Trust shall pay the Management Fee to the Investment Adviser monthly in
arrears generally within 20 business days after each month end. During any
period when the determination of net asset value is suspended by the Board of
Trustees, the average net asset value of a Share for the day prior to such
suspension shall for this purpose be deemed to be the net asset value of each
succeeding day until it is again determined.
(b) Performance Fee. The Trust shall pay to the Investment Adviser a
quarterly performance fee equal to 20% of the Aggregate Cumulative
Appreciation (defined below), if any, of the Trust's net assets, including
interest income, and as adjusted for subscriptions and redemptions on a
cumulative high water xxxx basis. Aggregate Cumulative Appreciation means the
total increase in Share value from the commencement of trading, minus the
total increase in Share value for all prior quarters multiplied by the number
of Shares outstanding. The Performance Fee shall accrue monthly and the Trust
shall pay the Performance Fee to the Investment Adviser quarterly.
(c) If this Agreement becomes effective subsequent to the first day of a
month or shall be terminated other than at the end of a period when a fee is
otherwise payable, Performance Fees shall be calculated as if such termination
date were the end of the calendar quarter and the Management Fee shall be
prorated based on the number of trading days for which services were rendered
divided by the total number of trading days in such month.
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4. LIMITATION OF LIABILITY OF THE INVESTMENT ADVISER
(a) The Investment Adviser and its affiliates, and their respective
principals, managers, members, directors, officers, shareholders, employees,
and controlling persons (together, the "Investment Adviser Parties") shall not
be liable to the Trust or any of its successors or assigns 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 the management of the Trust, except that the
Investment Adviser shall be liable in such capacity to the Trust, as
applicable, for losses, damages, costs and expenses sustained by the Trust, or
any of its successors or assigns as a result of (i) acts or omissions of the
Investment Adviser with respect to the Trust which constitute 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; (ii)
a material breach by the Investment Adviser of this Agreement; and (iii) a
misleading or untrue statement of a material fact or omission to state a
material fact relating to or concerning the Investment Adviser in its capacity
as investment adviser.
(b) The Trust shall indemnify, defend and hold harmless the Investment
Adviser Parties from and against any loss, liability, damage, cost or expense
actually and reasonably incurred (including any reasonable investigatory,
legal, and other expenses incurred in connection with, and any amounts paid
in, any settlement; provided that the Trust shall have approved such
settlement), arising from any act, omission, conduct or activity undertaken by
or on behalf of the Investment Adviser Parties; provided that, such act,
omission or conduct giving rise to the claim for indemnification did not
constitute 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.
(c) The Investment Adviser shall indemnify, defend and hold harmless the
Trust from and against all losses, claims, damages, liabilities, costs and
expenses sustained by the Trust (including in connection with the defense or
settlement of claims and in connection with any administrative proceedings),
to the extent and only to the extent that the Investment Adviser is liable to
the Trust pursuant to this Section 4. The Investment Adviser shall also
reimburse any legal and other expenses reasonably incurred by the Trust in
connection with investigating or defending any loss, claim, damage, liability,
cost or expense covered by this indemnity.
(d) Advances from the Trust to an indemnified party for legal expenses
and other costs incurred as a result of a legal action will be made only if
the following three conditions are satisfied: (1) the legal action relates to
the performance of duties or services by the Investment Adviser or its related
parties on behalf of the Trust; (2) the legal action is initiated by a person
which is not a party to this Agreement; and (3) the indemnified party
undertakes to repay the advanced funds to the Trust in cases in which it would
not be entitled to indemnification under this Section 4.
(e) The rights accruing to any indemnified party under these provisions
shall not exclude any other right to which such indemnified party may be
lawfully entitled.
(f) The provisions of this Section 4 shall survive the termination of
this Agreement or the termination of the services of the Investment Adviser.
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5. ACTIVITIES OF THE INVESTMENT ADVISER
(a) The investment management services of the Investment Adviser to the
Trust under this Agreement are not to be deemed exclusive with respect to the
Investment Adviser. The Trust acknowledges that the Investment Adviser will
render advisory, consulting and management services to other clients, which
may be charged different fees from those charged to the Trust. The Investment
Adviser shall be free to advise others and manage other accounts as well as
trade for proprietary accounts during the term of this Agreement and to use
the same or different information and trading methods and strategies which the
Investment Adviser obtains, produces or utilizes in the performance of
services for the Trust, and the Investment Adviser shall be free to compete
for the same instruments as the Trust or to take positions in instruments
which are the same as or opposite to the Trust's positions on behalf of the
Investment Adviser and/or any other account advised, managed or traded by the
Investment Adviser. It is agreed that the Investment Adviser may give advice
and take action with respect to such other clients or for its own accounts
that may differ from the advice or the timing or nature of action taken with
respect to the Trust. Furthermore, the Investment Adviser shall have no
obligation to recommend for purchase or sale for the Trust any asset that the
Investment Adviser or an affiliate may purchase or sell for its own account or
for the account of any of their clients.
6. DURATION AND TERMINATION OF THIS AGREEMENT
(a) This Agreement shall become effective as of the date first above
written and shall remain in force for a period of two years, and thereafter
continue from year to year, but only so long as such continuance specifically
is approved at least annually by (i) the Board of Trustees of the Trust, or by
the vote of a majority of the outstanding voting securities of the Trust, and
(ii) a majority of those Trustees 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.
(b) This Agreement may be terminated at any time, without the payment of
any penalty, by the Board of Trustees or by vote of a majority of the
outstanding voting securities of the Trust, or by the Investment Adviser, on
sixty (60) days' prior written notice to the other party. This Agreement shall
terminate automatically in the event of its assignment.
7. DEFINITIONS OF CERTAIN TERMS
(a) The terms "vote of a majority of the outstanding voting securities,"
"assignment," "affiliated person," and "interested person," when used in this
Agreement, shall have the respective meanings specified in the 1940 Act and
the rules and regulations thereunder, subject, however, to such exemptions as
may be granted by the Securities and Exchange Commission under said Act.
8. NOTICES
(a) All notices required or desired to be delivered under this Agreement
shall be delivered personally, by telex, telecopier or other means of
electronic communication, or by registered or certified mail, postage prepaid,
return receipt requested, as follows:
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If to the Investment Adviser:
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Xxxxxxxx & Company Investment Adviser LLC
000 Xxxx Xxxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
If to the Trust:
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The Xxxxxxxx Multi-Strategy Trust
000 Xxxx Xxxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
9. GOVERNING LAW
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware and the applicable provisions of the 1940
Act. To the extent that the applicable laws of the State of Delaware, or any
of the provisions herein, conflict with the applicable provisions of the 1940
Act, the latter shall control.
10. SURVIVAL OF CERTAIN TERMS
(a) The Trust's obligation to pay fees to the Investment Adviser for
services rendered prior to any termination of this Agreement pursuant to
Section 3 and the indemnities set forth in Section 4 shall survive any
termination of this Agreement.
11. ENTIRE AGREEMENT
(a) This Agreement constitutes the entire agreement between the parties
hereto with respect to the matters referred to herein, and no other agreement,
verbal or otherwise, shall be binding as between the parties unless it shall
be in writing and signed by the party against whom enforcement is sought.
12. SEVERABILITY
(a) The invalidity or unenforceability of any provision of this Agreement
or any covenant herein contained shall not affect the validity or
enforceability of any other provision or covenant hereof or herein contained
and any such invalid provision or covenant shall be deemed to be severable.
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13. AMENDMENT; WAIVER
(a) This Agreement may be amended by the parties only if such amendment
is specifically approved by a vote of the Board of Trustees of the Trust,
including a majority of those Trustees 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, where required by the 1940 Act, by
the vote of a majority of the outstanding voting securities of the Trust. No
waiver of any provision of this Agreement shall be implied from any course of
dealing between the parties hereto or from any failure by any party hereto to
assert its rights hereunder on any occasion or series of occasions.
14. COUNTERPARTS
(a) This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same agreement as if the signatures to
each counterpart were upon a single instrument. This Agreement shall become
effective when counterparts have been signed by each party and delivered to
the other parties, provided, that a facsimile signature shall be considered
due execution and shall be binding upon the signatory thereto with the same
force and effect as if the signature were an original and not a facsimile
signature.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
THE XXXXXXXX MULTI-STRATEGY TRUST
By:
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Name:
Title:
XXXXXXXX & COMPANY INVESTMENT ADVISER LLC
By: XXXXXXXX & COMPANY, INC.,
its Managing Manager
By:
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Name:
Title:
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