EXHIBIT G2
SUBADVISORY AGREEMENT
AGREEMENT made this __ day of January, 2007, by and among PARADIGM FUNDS
TRUST, a Delaware statutory trust (the "Trust") and Provident Asset Management,
LLC, a Delaware limited liability company (the "Investment Manager") and
PARADIGM Global Advisors, LLC, a Delaware limited liability company (the
"Subadvisor").
WHEREAS, the Trust is registered as a non-diversified, closed-end series
management investment company under the Investment Company Act of 1940, as
amended (the "Investment Company Act");
WHEREAS, the Trust has retained BISYS Fund Services Ohio, Inc. (the
"Administrator") to provide administration of the Trust's operations, subject to
the control of the Board of Trustees;
WHEREAS, pursuant to that certain investment advisory agreement dated as of
January ___, 2007, between the Trust and the Investment Manager (the "Investment
Advisory Agreement"), the Investment Manager was retained to manage the
investment and reinvestment of the assets of the Trust and to provide such other
services as specified therein;
WHEREAS, the Investment Advisory Agreement contemplates the retention by
the Investment Manager of a subadvisor;
WHEREAS, the Investment Manager deems it necessary to avail itself of the
experience, resources and facilities of the Subadvisor and desires to retain the
Subadvisor to render investment management services with respect to the series
set forth in Schedule A attached hereto and such other series as the Trust and
the Investment Manager may agree upon from time to time (the "Funds"); and
WHEREAS, the Subadvisor hereby accepts such retainer upon the terms and
conditions herein set forth.
NOW, THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows:
1. DUTIES OF SUBADVISOR. The Investment Manager employs the Subadvisor to
manage the investment and reinvestment of the assets of the Trust, and to
continuously review, supervise and (where appropriate) administer the investment
program of the Trust, to determine in its discretion (where appropriate) the
investments to be purchased or sold, to provide the Administrator and the Trust
with records concerning the Subadvisor's activities which the Trust is required
to maintain, and to render regular
reports to the Administrator and to the Trust's officers and Trustees concerning
the Subadvisor's discharge of the foregoing responsibilities.
The Subadvisor shall discharge the foregoing responsibilities subject to
the control of the Investment Manager and in compliance with such policies as
the Trustees may from time to time establish, and in compliance with the
objectives, policies, and limitations of each Fund as set forth in its
Prospectus, Statement of Additional Information and Declaration of Trust, as
amended from time to time, and applicable laws and regulations.
The Subadvisor accepts such employment and agrees, at its own expense, to
render the services and to provide the office space, furnishings and equipment
and the personnel required by it to perform the services on the terms and for
the compensation provided herein. The Subadvisor will not, however, pay for the
cost of securities, commodities, and other investments (including brokerage
commissions and other transaction charges, if any) purchased or sold for the
Trust.
2. TRUST TRANSACTIONS. The Subadvisor is authorized to select the brokers
or dealers that will execute the purchases and sales of a Fund's investments and
is directed to use its best efforts to obtain the best net results as described
from time to time in the Fund's Prospectus and Statement of Additional
Information. The Subadvisor will promptly communicate to the Administrator and
to the officers and the Trustees of the Trust such information relating to the
Trust's investment transactions as they may reasonably request.
It is understood that the Subadvisor will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Trust or be in breach of
any obligation owing to the Trust under this Agreement, or otherwise, by reason
of its having directed a securities transaction on behalf of a Fund to a
broker-dealer in compliance with the provisions of Section 28(e) of the
Securities Exchange Act of 1934, as amended, or as described from time to time
by the Fund's Prospectus and Statement of Additional Information.
3. COMPENSATION OF THE SUBADVISOR. The Subadvisor will not be entitled to
receive any management fees in conjunction with its provision of services as
provided in Sections 1 and 2 of this Agreement.
4. OTHER EXPENSES. The Subadvisor shall pay all expenses incurred with
respect to the printing and mailing of reports, Prospectuses, Statements of
Additional Information, and sales literature relating to the solicitation of
prospective shareholders. The Trust shall pay all expenses incurred with respect
to mailing to existing shareholders Prospectuses, Statements of Additional
Information, proxy solicitation material and shareholder reports.
5. EXCESS EXPENSES. If the expenses for the Trust for any fiscal year
(including fees and other amounts payable to the Subadvisor, but excluding
interest,
taxes, brokerage costs, litigation, and other extraordinary costs) as calculated
every business day would exceed the expense limitations imposed on investment
companies by any applicable statute or regulatory authority of any jurisdiction
in which shares of the Trust are qualified for offer and sale, the Subadvisor
shall bear such excess cost.
Payment of expenses by the Subadvisor pursuant to this Section 5 shall be
settled on a monthly basis (subject to fiscal year end reconciliation) by the
Subadvisor.
6. REPORTS. The Trust and the Subadvisor agree to furnish to each other, if
applicable, current Prospectuses, proxy statements, reports to shareholders,
certified copies of their financial statements, and such other information with
regard to their affairs as each may reasonably request.
7. STATUS OF SUBADVISOR. The services of the Subadvisor hereunder are not
to be deemed exclusive, and the Subadvisor shall be free to render similar
services to others so long as its services pursuant to this Agreement are not
impaired thereby. The Subadvisor shall be deemed to be an independent contractor
and shall, unless otherwise expressly provided or authorized, have no authority
to act for or represent the Investment Manager or the Trust in any way or
otherwise be deemed an agent of the Investment Manager or the Trust.
8. CERTAIN RECORDS. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated under the
Investment Company Act, which are prepared or maintained by the Subadvisor on
behalf of the Trust, are the property of the Trust and will be surrendered
promptly to the Trust on request.
9. LIMITATION OF LIABILITY OF SUBADVISOR. The duties of the Subadvisor
shall be confined to those expressly set forth herein, and no implied duties are
assumed by or may be asserted against the Subadvisor hereunder. The Subadvisor
shall not be liable 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 carrying out its
duties hereunder, except a loss resulting from 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, except as may otherwise be
provided under provisions of applicable state law or Federal securities law
which cannot be waived or modified hereby. (As used in this Paragraph 9, the
term "Subadvisor" shall include directors, officers, employees and other
corporate agents of the Subadvisor [as well as the limited liability company
itself]).
10. PERMISSIBLE INTERESTS. Trustees, agents, and shareholders of the Trust
are or may be interested in the Subadvisor (or any successor thereof) as
directors, partners, officers, or members, or otherwise; directors, partners,
officers, agents, and members of the Subadvisor are or may be interested in the
Trust as Trustees, Members or otherwise; and the Subadvisor (or any successor)
is or may be interested in the Trust as a shareholder or otherwise. In addition,
brokerage transactions for the Trust may be
effected through affiliates of the Subadvisor if approved by the Board of
Trustees, subject to the rules and regulations of the Securities and Exchange
Commission (the "SEC").
11. LICENSE OF SUBADVISOR'S NAME. The Subadvisor hereby agrees to grant a
license to the Trust for use of its name in the names of the Trust and the Funds
for the term of this Agreement and such license shall terminate upon termination
of this Agreement.
12. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall remain in effect until two years from date of execution,
and thereafter, for periods of one year so long as such continuance thereafter
is specifically approved at least annually (a) by the vote of a majority of
those Trustees of the Trust 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 (b) by the Trustees of the Trust or by vote of a
majority of the outstanding voting securities of the Trust; provided, however,
that if the Shareholders of the Trust fail to approve the Agreement as provided
herein, the Subadvisor may continue to serve hereunder in the manner and to the
extent permitted by the Investment Company Act and rules and regulations
thereunder. The foregoing requirement that continuance of this Agreement be
"specifically approved at least annually" shall be construed in a manner
consistent with the Investment Company Act and the rules and regulations
thereunder.
This Agreement may be terminated at any time, without the payment of any
penalty by vote of a majority of the Trustees of the Trust or by vote of a
majority of the outstanding voting securities of the Trust on not less than 30
days' nor more than 60 days' written notice to the Subadvisor, or by the
Subadvisor at any time without the payment of any penalty, on 90 days' written
notice to the Investment Manager. This Agreement will automatically and
immediately terminate in the event of its assignment. Any notice under this
Agreement shall be given in writing, addressed and delivered, or mailed
postpaid, to the other party at any office of such party.
As used in this Section 12, the terms "assignment", "interested persons",
and a "vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in the Investment Company Act and the rules and
regulations thereunder; subject to such exemptions as may be granted by the SEC
under said Act.
13. NOTICE. Any notice required or permitted to be given by either party to
the other shall be deemed sufficient if sent by registered or certified mail,
postage prepaid, addressed by the party giving notice to the other party at the
last address furnished by the other party to the party giving notice: if to the
Trust, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
______________________; if to the Investment Manager, 000 Xxxxxxx Xxxxxx, Xxxxx
0000, Xxx Xxxx, Xxx Xxxx, 00000, Attention: [Xxxxx Xxxxx]; and if to the
Subadvisor, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention:
________________________.
14. SEVERABILITY. 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.
15. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Delaware and the applicable provisions of the Investment
Company 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
Investment Company Act, the latter shall control.
A copy of the Certificate of Trust of the Trust is on file with the
Secretary of the State of Delaware, and notice is hereby given that this
instrument is executed on behalf of the Trustees of the Trust as Trustees, and
are not binding upon any of the Trustees, officers, or shareholders of the Trust
individually but binding only upon the assets and property of the Trust.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed as of the day and year first written above.
PARADIGM FUNDS TRUST
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
PROVIDENT ASSET MANAGEMENT, LLC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
PARADIGM GLOBAL ADVISORS, LLC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
SCHEDULE A DATED JANUARY ___, 2007
TO THE
SUBADVISORY AGREEMENT
DATED JANUARY ___, 2007
AMONG
PARADIGM FUNDS TRUST
AND
PROVIDENT ASSET MANAGEMENT, LLC
AND
PARADIGM GLOBAL ADVISORS, LLC
FUNDS
PARADIGM ADVISER SERIES MULTI STRATEGY FUND
PARADIGM ADVANTAGE MULTI STRATEGY FUND
PARADIGM INSTITUTIONAL SERIES MULTI STRATEGY FUND
EXHIBIT 2
SUBADVISORY AGREEMENT
AGREEMENT made this ___day of January, 2007, by and among PARADIGM Multi
Strategy Fund I, LLC, a Delaware limited liability company (the "Company"), and
Provident Asset Management, LLC, a Delaware limited liability company (the
"Investment Manager") and PARADIGM Global Advisors, LLC, a Delaware limited
liability company (the "Subadvisor").
WHEREAS, the Company is registered as a non-diversified, closed-end
management investment company under the Investment Company Act of 1940, as
amended (the "Investment Company Act");
WHEREAS, the Company has retained BISYS Fund Services Ohio, Inc. (the
"Administrator") to provide administration of the Company's operations, subject
to the control of the Board of Directors;
WHEREAS, pursuant to that certain investment advisory agreement dated as of
January ___, 2007, between the Company and the Investment Manager (the
"Investment Advisory Agreement"), the Investment Manager was retained to manage
the investment and reinvestment of the assets of the Company and to provide such
other services as specified therein;
WHEREAS, the Investment Advisory Agreement contemplates the retention by
the Investment Manager of a subadvisor;
WHEREAS, the Investment Manager deems it necessary to avail itself of the
experience, resources and facilities of the Subadvisor and desires to retain the
Subadvisor to render investment management services to the Company; and
WHEREAS, the Subadvisor hereby accepts such retainer upon the terms and
conditions herein set forth.
NOW, THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows:
1. DUTIES OF SUBADVISOR. The Investment Manager employs the Subadvisor to
manage the investment and reinvestment of the assets of the Company, and to
continuously review, supervise and (where appropriate) administer the investment
program of the Company, to determine in its discretion (where appropriate) the
investments to be purchased or sold, to provide the Administrator and the
Company with records concerning the Subadvisor's activities which the Company is
required to maintain, and to render regular reports to the Administrator and to
the Company's officers and Directors concerning the Subadvisor's discharge of
the foregoing responsibilities.
The Subadvisor shall discharge the foregoing responsibilities subject
to the control of the Investment Manager and in compliance with such policies as
the Directors may from time to time establish, and in compliance with the
objectives, policies, and limitations of the Company as set forth in its
Prospectus, Statement of Additional Information and Operating Agreement, as
amended from time to time, and applicable laws and regulations.
The Subadvisor accepts such employment and agrees, at its own expense,
to render the services and to provide the office space, furnishings and
equipment and the personnel required by it to perform the services on the terms
and for the compensation provided herein. The Subadvisor will not, however, pay
for the cost of securities, commodities, and other investments (including
brokerage commissions and other transaction charges, if any) purchased or sold
for the Company.
2. COMPANY TRANSACTIONS. The Subadvisor is authorized to select the brokers
or dealers that will execute the purchases and sales of the Company's
investments and is directed to use its best efforts to obtain the best net
results as described from time to time in the Company's Prospectus and Statement
of Additional Information. The Subadvisor will promptly communicate to the
Administrator and to the officers and the Directors of the Company such
information relating to the Company's investment transactions as they may
reasonably request.
It is understood that the Subadvisor will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Company or be in breach
of any obligation owing to the Company under this Agreement, or otherwise, by
reason of its having directed a securities transaction on behalf of the Company
to a broker-dealer in compliance with the provisions of Section 28(e) of the
Securities Exchange Act of 1934, as amended, or as described from time to time
by the Company's Prospectus and Statement of Additional Information.
3. COMPENSATION OF THE SUBADVISOR. For the services to be rendered by the
Subadvisor as provided in Sections 1 and 2 of this Agreement, the Subadvisor is
entitled to receive from persons who purchase Units of the Company ("Members")
an annual management fee (the "Management Fee") in the amount set forth in
Schedule A annexed hereto as the same may be amended from time to time as agreed
by the parties hereto. The Subadvisor's fee is calculated and accrued monthly
and is paid out to the Subadvisor on a monthly basis. For purposes of
determining the Management Fee, net assets will be determined by taking into
account net realized gain or loss and the net change in unrealized appreciation
or depreciation of net assets.
All rights of compensation under this Agreement for services performed
as of the termination date shall survive the termination of this Agreement.
4. OTHER EXPENSES. The Subadvisor shall pay all expenses incurred with
respect to the printing and mailing of reports, prospectuses, statements of
additional information, and sales literature relating to the solicitation of
prospective
clients. The Company shall pay all expenses incurred with respect to mailing to
existing Members prospectuses, statements of additional information, proxy
solicitation material and Member reports.
5. EXCESS EXPENSES. If the expenses for the Company for any fiscal year
(including fees and other amounts payable to the Subadvisor, but excluding
interest, taxes, brokerage costs, litigation, and other extraordinary costs) as
calculated every business day would exceed the expense limitations imposed on
investment companies by any applicable statute or regulatory authority of any
jurisdiction in which Units of the Company are qualified for offer and sale, the
Subadvisor shall bear such excess cost.
Payment of expenses by the Subadvisor pursuant to this Section 5 shall be
settled on a monthly basis (subject to fiscal year end reconciliation) by the
Subadvisor.
6. REPORTS. The Company and the Subadvisor agree to furnish to each other,
if applicable, current prospectuses, proxy statements, reports to Members,
certified copies of their financial statements, and such other information with
regard to their affairs as each may reasonably request.
7. STATUS OF SUBADVISOR. The services of the Subadvisor hereunder are not
to be deemed exclusive, and the Subadvisor shall be free to render similar
services to others so long as its services pursuant to this Agreement are not
impaired thereby. The Subadvisor shall be deemed to be an independent contractor
and shall, unless otherwise expressly provided or authorized, have no authority
to act for or represent the Investment Manager or the Company in any way or
otherwise be deemed an agent of the Investment Manager or the Company.
8. CERTAIN RECORDS. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-l and Rule 31a-2 promulgated under the
Investment Company Act which are prepared or maintained by the Subadvisor on
behalf of the Company are the property of the Company and will be surrendered
promptly to the Company on request.
9. LIMITATION OF LIABILITY OF SUBADVISOR. The duties of the Subadvisor
shall be confined to those expressly set forth herein, and no implied duties are
assumed by or may be asserted against the Subadvisor hereunder. The Subadvisor
shall not be liable 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 carrying out its
duties hereunder, except a loss resulting from 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, except as may otherwise be
provided under provisions of applicable state law or Federal securities law
which cannot be waived or modified hereby. (As used in this Paragraph 9, the
term "Subadvisor" shall include directors, officers, employees and other
corporate agents of the Subadvisor [as well as the Limited Liability Company
itself]).
10. PERMISSIBLE INTERESTS. Directors, agents, and Members of the Company
are or may be interested in the Subadvisor (or any successor thereof) as
directors, partners, officers, or Members, or otherwise; directors, partners,
officers, agents, and Members of the Subadvisor are or may be interested in the
Company as Directors, Members or otherwise; and the Subadvisor (or any
successor) is or may be interested in the Company as a Member or otherwise. In
addition, brokerage transactions for the Company may be effected through
affiliates of the Subadvisor if approved by the Board of Directors, subject to
the rules and regulations of the Securities and Exchange Commission (the "SEC").
11. LICENSE OF SUBADVISOR'S NAME. The Subadvisor hereby agrees to grant a
license to the Company for use of its name in the names of the Company for the
term of this Agreement and such license shall terminate upon termination of this
Agreement.
12. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall remain in effect until two years from date of execution,
and thereafter, for periods of one year so long as such continuance thereafter
is specifically approved at least annually (a) by the vote of a majority of
those Directors of the Company 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 (b) by the Directors of the Company or
by vote of a majority of the outstanding voting Units of the Company; provided,
however, that if the Members of the Company fail to approve the Agreement as
provided herein, the Subadvisor may continue to serve hereunder in the manner
and to the extent permitted by the Investment Company Act and rules and
regulations thereunder. The foregoing requirement that continuance of this
Agreement be "specifically approved at least annually" shall be construed in a
manner consistent with the Investment Company Act and the rules and regulations
thereunder. This Agreement may be terminated at any time, without the payment of
any penalty by vote of a majority of the Directors of the Company or by vote of
a majority of the outstanding voting Units of the Company on not less than 30
days' nor more than 60 days' written notice to the Subadvisor, or by the
Subadvisor at any time without the payment of any penalty, on 90 days' written
notice to the Investment Manager. This Agreement will automatically and
immediately terminate in the assignment. Any notice under this Agreement shall
be given in writing, addressed and delivered, or mailed postpaid, to the other
party at any office of such party. As used in this Section 12, the terms
"assignment", "interested persons", and a "vote of a majority of the outstanding
voting securities" shall have the respective meanings set forth in the
Investment Company Act and the rules and regulations thereunder; subject to such
exemptions as may be granted by the SEC under said Act.
13. NOTICE. Any notice required or permitted to be given by either party to
the other shall be deemed sufficient if sent by registered or certified mail,
postage prepaid, addressed by the party giving notice to the other party at the
last address furnished by the other party to the party giving notice: if to the
Company, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000 Attention: ________;
if to the Investment
Manager at 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000, Attention: [Xxxxx
Xxxxx]; and if to the Subadvisor, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX
00000, Attention: __________________.
14. SEVERABILITY. 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.
15. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of New York and the applicable provisions of the Investment
Company Act. To the extent that the applicable laws of the State of New York, or
any of the provisions herein, conflict with the applicable provisions of the
Investment Company Act, the latter shall control.
A copy of the Certificate of Formation of the Company is on file with the
Secretary of the State of Delaware, and notice is hereby given that this
instrument is executed on behalf of the Directors of the Company as Directors,
and are not binding upon any of the Directors, officers, or Members of the
Company individually but binding only upon the assets and property of the
Company.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first written above.
PARADIGM Multi Strategy Fund I, LLC
By:
---------------------------------
Attest:
-----------------------------
Provident Asset Management, LLC
By:
---------------------------------
Attest:
-----------------------------
PARADIGM Global Advisors, LLC
By:
---------------------------------
Attest:
-----------------------------
SCHEDULE A
COMPENSATION OF THE SUBADVISOR
[To be provided.]
