Exhibit 2(g)(1)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this __ day of ____________, 2005, between
Mellon Optima L/S Strategy Fund, LLC, a Delaware limited liability company (the
“Fund”), and Mellon Hedge Advisors, LLC, a Delaware limited liability
company (the “Adviser”).
WITNESSETH:
WHEREAS, the Fund is engaged in business as a closed-end management
investment company and is so registered under the Investment Company Act of
1940, as amended (the “1940 Act”); and
WHEREAS, the Adviser is engaged in the business of rendering
investment advisory and management services, and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Fund desires to retain the Adviser to furnish
investment advisory services to the Fund, and the Adviser is willing to furnish
such services;
NOW, THEREFORE, it is hereby agreed between the parties hereto as
follows:
1. Appointment of the Adviser.
The Fund hereby appoints the Adviser to act as investment adviser
of the Fund for the period and on the terms herein set forth. The Adviser
accepts such appointment and agrees to render the services herein set forth, for
the compensation herein provided. The Adviser shall for all purposes herein be
deemed an independent contractor and shall, unless expressly otherwise provided,
have no authority to act for or represent the Fund in any way nor shall it
otherwise be deemed an agent of the Fund.
2. Duties of the Adviser.
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(a) |
The Adviser, at its expense, will furnish continuously an
investment program for the Fund, will determine, subject to the overall
supervision and review of the directors of the Fund, what investments shall be
purchased, held, sold or exchanged by the Fund and what portion, if any, of the
assets of the Fund will be held uninvested, and shall, on behalf of the Fund,
make changes in the investments of the Fund. Subject always to the supervision
of the directors of the Fund and to the provisions of the Fund's Limited
Liability Company Agreement (the "LLC Agreement") and of the 1940 Act, the
Adviser will also manage, supervise and conduct the other affairs and business
of the Fund and matters incidental thereto. |
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(b) |
In furtherance of and subject to the foregoing, the Adviser will have full power
and authority on behalf of the Fund, among other matters: |
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(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; |
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(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 Investment Funds (as
defined in the Fund's Confidential Memorandum (the "Memorandum")); |
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(3) |
to enter into agreements with the Investment Funds irrevocably to forego the
Fund's right to vote its interests or shares of the Investment Funds; |
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(4) |
to enter into agreements with the Investment Funds that provide
for, among other things, the indemnification by the Fund of the Investment Funds
and the Investment Managers (as defined in the Memorandum), and to terminate
such agreements; |
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(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 Adviser 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(d); |
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(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; |
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(7) |
to call and conduct meetings of Members at the Fund's principal
office or elsewhere as it may determine and to assist the directors of the fund
in calling and conducting meetings of the directors; |
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(8) |
to engage and terminate such attorneys, accountants and other
professional advisers and consultants as the Adviser may deem necessary or
advisable in connection with the affairs of the Fund or as may be directed by
the directors of the Fund; |
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(9) |
to engage and terminate the services of persons (other than sub-advisers, the
engagement of which shall be subject to Paragraph 2(c)) to assist the Adviser in
providing, or to provide under the Adviser's control and supervision, advice and
management to the Fund at the expense of the Adviser and to terminate such
services; |
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(10) |
as directed by the directors of the Fund, to commence, defend and
conclude any action, suit, investigation or other proceeding that pertains to
the Fund or any assets of the Fund; |
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(11) |
if directed by the directors of the Fund, 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 Adviser, 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 directors of the Fund or the Adviser, or any
of their principals, directors, officers, members, employees and agents; |
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(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 Adviser, necessary and appropriate for the conduct of the
business of the Fund without the act, vote or approval of any other Members or
person; |
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(13) |
to obtain, on a quarterly basis, the net asset value of each
Investment Fund and a copy of each Investment Fund's most recent financial
report, and to report thereon to the Fund's board of directors; |
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(14) |
to (A) prepare Member communications, including performance
reports and investment commentary, and (B) provide data for financial and other
reporting purposes; and |
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(15) |
to support Fund Member services and review the activities of
third-party service providers. |
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(c) |
In carrying out its responsibilities hereunder, the Adviser may
employ, retain or otherwise avail itself of the services of other persons or
entities including, without limitation, affiliates of the Adviser, on such terms
as the Adviser shall determine to be necessary, desirable or appropriate.
Without limiting the generality of the foregoing, and subject to the
requirements of Section 15 of the 1940 Act, the Adviser may retain one or more
sub-advisers to manage all or a portion of the investment portfolio of the Fund,
at the Adviser's own cost and expense. 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 Adviser under
this Agreement and the 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 Adviser's duties hereunder. |
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(d) |
The Adviser, in its discretion, may use brokers who provide the
Fund with research, analysis, advice and similar services to execute portfolio
transactions on behalf of the Fund, and the Adviser 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 Adviser's good faith determination that
such commission is reasonable in terms either of the particular transaction or
of the overall responsibility of the Adviser to the Fund and its other clients
and that the total commissions paid by the Fund will be reasonable in relation
to the benefits to the Fund over the long term. Whenever the Adviser
simultaneously places orders to purchase or sell the same security on behalf of
the Fund and one or more other accounts advised by the Adviser, 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. |
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(e) |
The Adviser, and any affiliates thereof, shall be free to render
similar services to other investment companies and other clients and to engage
in other activities, so long as the services rendered hereunder are not
impaired. |
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(f) |
The Adviser shall bear the non-recurring initial offering and
organizational costs of the Fund, and shall provide, without cost to the Fund,
all necessary office space and the services of executive personnel for
administering the affairs of the Fund, excepting those services to be provided
by the Fund's administrator pursuant to an administration agreement with such
entity. |
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(g) |
The Fund shall bear the expenses of its operations, other than the
Fund's initial offering and organizational expenses and any other expenses
specifically assumed by the Adviser 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: |
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(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, 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 Investment Funds; |
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(2) |
all costs and expenses associated with the ongoing operation and
registration of the Fund, and the costs of compliance with any applicable
Federal or state laws; |
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(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
LLC Agreement, the 1940 Act or other applicable law; |
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(4) |
the fees and disbursements of any attorneys, accountants, auditors
and other consultants and professionals engaged on behalf of the Fund; |
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(5) |
a portion of the costs, as determined by the directors of the
Fund, of a fidelity bond and any liability or other insurance obtained on behalf
of the Fund, the Adviser or the Fund's officers and directors; |
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(6) |
all costs and expenses of preparing, setting in type, printing and
distributing reports and other communications to Members; |
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(7) |
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; |
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(8) |
all charges for equipment or services used for communications
between the Fund and any custodian, or other agent engaged by the Fund; |
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(9) |
the fees of custodians and other persons providing administrative
services to the Fund; and |
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(10) |
such other types of expenses as may be approved from time to time
by the Fund's directors. |
The
Adviser shall be entitled to reimbursement from the Fund for any of the above
expenses paid by the Adviser from time to time on behalf of the Fund.
3. Compensation of the Adviser.
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(a) |
As full compensation for the services and facilities furnished by
the Adviser under this Agreement, the Fund agrees to pay to the Adviser a
monthly fee at the annual rate of ____% of the Fund's "net assets" for the
month, excluding assets attributable to the capital account, if any, of the
Adviser. "Net Assets" shall equal the total value of all assets of the Fund,
less an amount equal to all accrued debts, liabilities and obligations of the
Fund . The compensation payable to the Adviser hereunder will be computed based
on the net assets of the Fund as of the close of business on the last business
day of the month to which the Adviser's fee relates, before adjustment for any
repurchase of interests payable on such date, and will be payable in
arrears. |
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(b) |
The compensation payable to the Adviser hereunder for any period
less than a full month during which this Agreement is in effect shall be
prorated according to the proportion which such period bears to a full
month. |
4. Limitation of Liability of the
Adviser.
Neither the Adviser nor any
member, director, officer or employee of the Adviser, or any of their
affiliates, shall be liable for any error of judgment or mistake of law or for
any loss suffered by the Fund in connection with the performance of services to
the Fund; provided, however, that nothing herein contained shall
be construed to protect the Adviser or any such other person against any
liability to the Fund by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its obligations and duties under this Agreement.
5. Term and Termination.
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(a) |
This Agreement shall become effective on the date hereof. Unless
terminated as herein provided, this Agreement shall remain in full force and
effect until __________, 2007 and shall continue in full force and effect for
successive periods of one year thereafter, but only so long as each such
continuance is approved annually: (i) by either the directors of the Fund or by
vote of a majority of the outstanding voting securities (as defined in the 0000
Xxx) of the Fund, and, in either event, (ii) by vote of a majority of the
directors of the Fund who are not parties to this Agreement or "interested
persons" (as defined in the 0000 Xxx) of any such party, cast in person at a
meeting called for the purpose of voting on such approval. |
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(b) |
This Agreement may be terminated at any time without the payment
of any penalty by vote of the directors of the Fund or by vote of a majority of
the outstanding voting securities of the Fund or by the Adviser, on sixty days'
written notice to the other party. |
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(c) |
This Agreement shall automatically and immediately terminate in the event of its assignment as defined
in the 1940 Act. |
6. Limitation of Liability.
It
is expressly agreed that the obligations of the Fund hereunder shall not be
binding upon any of the directors, members, nominees, officers, agents or
employees of the Fund, personally, but shall bind only the property of the Fund
as provided in this Agreement. The execution and delivery of this Agreement have
been authorized by the directors and the members of the Fund and this Agreement
has been signed by an authorized officer of the Fund, acting as such.
IN
WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
executed as of the date first written above.
Attest:
_____________________________________ |
MELLON OPTIMA L/S STRATEGY FUND, LLC
By:________________________________________________
Its:_______________________________________________
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Attest:
_____________________________________ |
MELLON HEDGE ADVISORS, LLC
By:________________________________________________
Its:_______________________________________________
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