INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT (the "AGREEMENT") made as of this 11th
day of September, 2015 by and between Xxxxxx Diversified Opportunities
Fund (the "TRUST" or "Fund"), a Delaware statutory trust registered as a closed
end investment management company under the Investment Company Act of 1940, as
amended (the "1940 ACT"), and Xxxxxx Capital US LLC (the "ADVISER"), a Delaware
limited liability company located at 000 Xxxx Xxxxxx, 00(xx) Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
W I T N E S S E T H
WHEREAS, the Board of Trustees (the "BOARD") of the Trust has
selected the Adviser to act as investment adviser to the Trust in consideration
of the fees as set forth on Schedule A to this Agreement (the "SCHEDULE"), as
such Schedule may be amended from time to time upon mutual agreement of the
parties, and to provide certain related services, as more fully set forth
below, and to perform such services under the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Trust and the Adviser do hereby agree as follows:
1. THE ADVISER'S SERVICES.
(a) DISCRETIONARY INVESTMENT MANAGEMENT SERVICES. The Adviser shall
act as investment adviser with respect to the Fund. In such capacity, the
Adviser shall, subject to the supervision of the Board, furnish continuously an
investment program for the Fund, consistent with the investment objectives and
policies of the Fund. The Adviser shall determine, from time to time, what
securities or other investments shall be purchased for the Fund, what securities
or other instruments shall be held or sold by the Fund and what portion of the
Fund's assets shall be held uninvested in cash, subject always to the provisions
of the Trust's Agreement and Declaration of Trust, By-Laws and its registration
statement on Form N-1A (the "REGISTRATION STATEMENT") under the 1940 Act, and
under the Securities Act of 1933, as amended (the "1933 ACT"), covering Fund
shares, as filed with the Securities and Exchange Commission (the "COMMISSION"),
and to the investment objectives, policies and restrictions of the Fund, as each
of the same shall be from time to time in effect. To carry out such obligations,
the Adviser shall exercise full discretion and act for the Fund in the same
manner and with the same force and effect as the Fund itself might or could do
with respect to purchases, sales or other transactions, as well as with respect
to all other such things necessary or incidental to the furtherance or conduct
of such purchases, sales or other transactions. No reference in this Agreement
to the Adviser having full discretionary authority over the Fund's investments
shall in any way limit the right of the Board, in its sole discretion, to
establish or revise policies in connection with the management of the Fund's
assets or to otherwise exercise its right to control the overall management of
the Fund.
(b) COMPLIANCE. The Adviser agrees to comply with the requirements of
all applicable federal and state laws, rules and regulations that relate to the
services and relationships described hereunder and to the conduct of its
business as a registered
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investment adviser. The Adviser also agrees to comply with the objectives,
policies and restrictions set forth in the Registration Statement, as amended
or supplemented, and with any policies, guidelines, instructions and procedures
approved by the Board and provided to the Adviser. In selecting the Fund's
portfolio securities and other instruments, and performing the Adviser's
obligations hereunder, the Adviser shall cause the Fund to comply with the
diversification and source of income requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended (the "CODE"), for qualification as a
regulated investment company if the Fund has elected to be treated as such. The
Adviser shall maintain compliance procedures that it reasonably believes are
adequate to ensure its compliance with the foregoing. No supervisory activity
undertaken by the Board shall limit the Adviser's full responsibility for any
of the foregoing.
(c) PROXY VOTING. The Board has the authority to determine how
proxies with respect to securities that are held by the Fund shall be voted,
and the Board has determined to delegate the authority and responsibility to
vote proxies for the Fund's securities to the Adviser. The Adviser shall
exercise its proxy voting responsibilities in accordance with any instructions
that the Board shall provide from time to time and in accordance with the
Adviser's proxy voting policies and procedures, as presented to the Trust, and
in a manner that the Adviser reasonably believes best serves the interests of
the Fund's shareholders, and at all times in a manner consistent with the
Investment Advisers Act of 1940, as amended (the "ADVISERS ACT") and its
fiduciary responsibilities to the Trust. The Adviser shall provide periodic
reports and keep records relating to proxy voting as the Board may reasonably
request or as may be necessary for the Fund to comply with the 1940 Act and
other applicable law. Any such delegation of proxy voting responsibility to the
Adviser may be revoked or modified by the Board at any time.
The Adviser is authorized to instruct the Fund's custodian and/or broker(s) to
forward promptly to the Adviser or designated service provider copies of all
proxies and shareholder communications relating to securities held in the
portfolio of the Fund (other than materials relating to legal proceedings
against the Fund). The Adviser may also instruct the Fund's custodian and/or
broker(s) to provide reports of holdings in the portfolio of the Fund. The
Adviser has the authority to engage a service provider to advise it with
respect to voting Fund proxies and assist with administrative functions related
to voting Fund proxies. The Trust shall direct the Fund's custodian and/or
broker(s) to provide any assistance requested by the Adviser in facilitating
the use of a service provider. In no event shall the Adviser have any
responsibility to vote proxies that are not received on a timely basis. The
Trust acknowledges that the Adviser, consistent with the Adviser's written
proxy voting policies and procedures, may refrain from voting a proxy if, in
the Adviser's discretion, refraining from voting would be in the best interests
of the Fund and its shareholders.
(d) RECORDKEEPING. The Adviser shall not be responsible for the
provision of administrative, bookkeeping or accounting services to the Fund,
except as otherwise provided herein or as may be necessary for the Adviser to
supply to the Trust or its Board the information required to be supplied under
this Agreement.
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The Adviser shall maintain separate books and detailed records of all
matters pertaining to Fund assets advised by the Adviser, as required by Rule
31a-1 under the 1940 Act (other than those records being maintained by any
administrator, custodian or transfer agent appointed by the Fund) relating to
its responsibilities provided hereunder with respect to the Fund, and shall
preserve such records for the periods and in a manner prescribed therefore by
Rule 31a-2 under the 1940 Act (the "FUND BOOKS AND RECORDS"). The Fund Books
and Records shall be available to the Board promptly upon reasonable request,
shall be delivered to the Trust upon the termination of this Agreement and
shall be available without undue delay during any day the Trust and the Adviser
is open for business.
(e) HOLDINGS INFORMATION AND PRICING. The Adviser shall provide
regular reports regarding Fund holdings, and may, on its own initiative,
furnish the Trust and its Board from time to time with whatever information the
Adviser believes is appropriate for this purpose. The Adviser agrees to notify
the Trust promptly if the Adviser reasonably believes that the value of any
security or other instrument held by the Fund may not reflect fair value. The
Adviser agrees to provide upon request any pricing information of which the
Adviser is aware and which it is permitted to disclose to the Trust, its Board
and/or any Fund pricing agent to assist in the determination of the fair value
of any Fund holdings for which market quotations are not readily available or
as otherwise required in accordance with the 1940 Act or the Trust's valuation
procedures for the purpose of calculating the Fund net asset value in
accordance with procedures and methods established by the Board.
(f) COOPERATION WITH AGENTS OF THE TRUST. The Adviser agrees to
cooperate with and provide reasonable assistance to the Trust, any Trust
custodian or foreign sub-custodians, any Trust pricing agents and all other
agents and representatives of the Trust with respect to such information
regarding the Fund as such entities may reasonably request from time to time in
the performance of their obligations and provide prompt responses to reasonable
requests made by such persons.
2. CODE OF ETHICS. The Adviser has adopted a written code of ethics
that it reasonably believes complies with the requirements of Rule 17j-1 under
the 1940 Act, which it has provided to the Trust. The Adviser shall use all
reasonable efforts to ensure that its Access Persons (as defined in the
Adviser's Code of Ethics) comply in all material respects with the Adviser's
Code of Ethics, as in effect from time to time. Upon request, the Adviser shall
provide the Trust with a (i) copy of the Adviser's current Code of Ethics, as
in effect from time to time, and (ii) certification that it has adopted
procedures reasonably designed to prevent Access Persons from engaging in any
conduct prohibited by the Adviser's Code of Ethics. Annually, the Adviser shall
furnish a written report, which complies with the requirements of Rule 17j-1,
concerning the Adviser's Code of Ethics to the Trust's Board. The Adviser
shall respond to requests for information from the Trust as to any violations
of the Code by Access Persons and the sanctions imposed by the Adviser. The
Adviser shall as promptly as practicable notify the Trust of any material
violation of the Code, whether or not such violation relates to a security held
by the Fund.
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3. INFORMATION AND REPORTING. The Adviser shall provide the Trust and
its officers with such periodic reports concerning the obligations the Adviser
has assumed under this Agreement as the Trust may from time to time reasonably
request.
(a) NOTIFICATION OF BREACH / COMPLIANCE REPORTS. The Adviser shall
notify the Trust's chief compliance officer as soon as reasonably practicable
upon detection of (i) any material failure to manage the Fund in accordance
with its investment objectives and policies or any applicable law; or (ii) any
material breach of any of the Fund's or the Adviser's policies, guidelines or
procedures. In addition, the Adviser shall provide a quarterly report
regarding the Fund's compliance with its investment objectives and policies,
applicable law, including, but not limited to the 1940 Act and Subchapter M of
the Code, as applicable, and the Fund's policies, guidelines or procedures as
applicable to the Adviser's obligations under this Agreement. The Adviser shall
take such action as it deems necessary to correct any such failure taking into
account the Board's reasonable requests. Upon request, the Adviser shall also
provide the officers of the Trust with supporting certifications as reasonably
required in connection with such certifications of Fund financial statements
and disclosure controls pursuant to the Xxxxxxxx-Xxxxx Act. The Adviser will
promptly notify the Trust in the event (i) the Adviser is served or otherwise
receives notice of any action, suit, proceeding, inquiry or investigation, at
law or in equity, before or by any court, public board, or body, involving the
affairs of the Trust (excluding class action suits in which the Fund is a
member of the plaintiff class by reason of the Fund's ownership of shares in
the defendant) or the compliance by the Adviser with the federal or state
securities laws or (ii) an actual change in control of the Adviser resulting in
an "assignment" (as defined in the 1940 Act) has occurred or is otherwise
proposed to occur.
(b) BOARD AND FILINGS INFORMATION. The Adviser will provide the Trust
with any information reasonably requested regarding its management of the Fund
required for any meeting of the Board, or for any shareholder report, Form
N-CSR, Form N-Q, Form N-PX, Form N-SAR, amended registration statement, proxy
statement, or prospectus supplement to be filed by the Trust with the
Commission. The Adviser will make its officers and employees available, either
in person or, at the mutual convenience of the Board and the Adviser, by
telephone or other electronic media, on due notice, to review the Adviser's
investment management services to the Fund and shall furnish to the Board such
information as may reasonably be necessary in order for the Board to evaluate
this Agreement or any proposed amendments thereto.
(c) TRANSACTION INFORMATION. The Adviser shall furnish to the Trust
such information concerning portfolio transactions as may be necessary to
enable the Trust or its designated agent to perform such compliance testing on
the Fund and the Adviser's services as the Trust may, in its sole discretion,
determine to be appropriate. The provision of such information by the Adviser
to the Trust or its designated agent in no way relieves the Adviser of its own
responsibilities under this Agreement.
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4. BROKERAGE.
(a) PRINCIPAL TRANSACTIONS. In connection with purchases or sales of
securities or other instruments for the account of the Fund, neither the
Adviser nor any of its directors, officers or employees will act as a principal
or agent or receive any commission except as permitted by the 1940 Act.
(b) PLACEMENT OF ORDERS. The Adviser shall arrange for the placing
of all orders for the purchase and sale of securities or other instruments for
the Fund's account with brokers or dealers selected by the Adviser. In the
selection of such brokers or dealers and the placing of such orders, the
Adviser is directed at all times to seek for the Fund the most favorable
execution and net price available under the circumstances. It is also
understood that it is desirable for the Fund that the Adviser have access to
brokerage and research services provided by brokers who may execute brokerage
transactions at a higher cost to the Fund than may result when allocating
brokerage to other brokers, consistent with section 28(e) of the Securities
Exchange Act of 1934, as amended (the "1934 ACT") and any Commission staff
interpretations thereof. Therefore, the Adviser is authorized to place orders
for the purchase and sale of securities or other instruments for the Fund with
such brokers, subject to review by the Board 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 the Adviser in connection
with its or its affiliates' services to other clients.
(c) AGGREGATED TRANSACTIONS. On occasions when the Adviser deems the
purchase or sale of a security or other instrument to be in the best interest
of the Fund as well as other clients of the Adviser, the Adviser, to the extent
permitted by applicable law and regulations, may, but shall be under no
obligation to, aggregate the order for securities or other instruments to be
sold or purchased. In such event, the Adviser will allocate securities or other
instruments so purchased or sold, as well as the expenses incurred in the
transaction, in the manner the Adviser considers to be most equitable and
consistent with its fiduciary obligations to the Fund and to such other clients
over time.
(d) AFFILIATED BROKERS. The Adviser or any of its affiliates may act
as broker in connection with the purchase or sale of securities or other
investments for the Fund, subject to: (a) the requirement that the Adviser seek
to obtain best execution and price within the policy guidelines determined by
the Board and set forth in the Registration Statement; (b) the provisions of
the 1940 Act; (c) the provisions of the Advisers Act; (d) the provisions of the
1934 Act; and (e) other provisions of applicable law. These brokerage services
are not within the scope of the duties of the Adviser under this Agreement.
Subject to the requirements of applicable law and any procedures adopted by the
Board, the Adviser or its affiliates may receive brokerage commissions, fees or
other remuneration from the Fund for these services in addition to the
Adviser's fees for services under this Agreement.
5. CUSTODY. Nothing in this Agreement shall permit the Adviser to
take or receive physical possession of cash, securities or other investments of
the Fund.
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6. ALLOCATION OF CHARGES AND EXPENSES. The Adviser will bear its own
costs of providing services hereunder. Other than as herein specifically
indicated, the Adviser shall not be responsible for the Fund's expenses,
including brokerage and other expenses incurred in placing orders for the
purchase and sale of securities and other investment instruments.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) PROPERLY REGISTERED. The Adviser is registered as an investment
adviser under the Advisers Act, and will remain so registered for the duration
of this Agreement. The Adviser is not prohibited by the Advisers Act or the 1940
Act from performing the services contemplated by this Agreement, and to the best
knowledge of the Adviser, there is no proceeding or investigation that is
reasonably likely to result in the Adviser being prohibited from performing the
services contemplated by this Agreement. The Adviser agrees to promptly notify
the Trust of the occurrence of any event that would disqualify the Adviser from
serving as an investment adviser to an investment company. The Adviser is in
compliance in all material respects with all applicable federal and state law in
connection with its investment management operations.
(b) ADV DISCLOSURE. The Adviser has provided the Trust with a copy of
its Form ADV Part I as most recently filed with the SEC and its current Part II
and will, promptly after filing any amendment to its Form ADV with the SEC
updating its Part II, furnish a copy of such amendments or updates to the
Trust. The information contained in the Adviser's Form ADV does not contain any
untrue statement of any material fact and does not omit to state any material
fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
(c) FUND DISCLOSURE DOCUMENTS. The Adviser has reviewed, and will in
the future review, the Registration Statement and any amendment or supplements
thereto, the annual or semi-annual reports to shareholders, other reports filed
with the Commission and any marketing materials of the Fund (collectively the
"DISCLOSURE DOCUMENTS") and represents and warrants that, with respect to
disclosures about the Adviser, the manner in which the Adviser manages the Fund
or information relating directly or indirectly to the Adviser, such Disclosure
Documents contain or will contain, as at the date of the Adviser's review, no
untrue statement of any material fact and will not omit any statement of
material fact which was required to be stated therein or necessary to make the
statements contained therein, in the light of the circumstances under which
they were made, not misleading.
(d) USE OF THE NAME "XXXXXX". Subject to the terms set forth in
Section 8 of this Agreement, the Trust shall have the right to use the name
"Xxxxxx" in connection with the management and operation of the Fund. The
Adviser is not aware of any threatened or existing actions, claims, litigation
or proceedings that would adversely affect or prejudice the rights of the
Adviser or the Trust to use the name "Xxxxxx."
(e) INSURANCE. The Adviser maintains an appropriate level of
professional indemnity insurance and shall provide prior written notice to the
Trust (i) of any material changes in its insurance policies or insurance
coverage; or (ii) if any material claims will
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be made on its insurance policies. Furthermore, the Adviser shall, upon
reasonable request, provide the Trust with any information it may reasonably
require concerning the amount of or scope of such insurance.
(f) NO DETRIMENTAL AGREEMENT. The Adviser represents and warrants
that it has no arrangement or understanding with any party, other than the
Trust, that would adversely influence the decision of the Adviser with respect
to its selection of securities for the Fund, and that all selections shall be
done in accordance with what is in the best interest of the Fund.
(g) CONFLICTS. The Adviser shall act honestly, in good faith and in
the best interests of the Trust including requiring any of its personnel with
knowledge of Fund activities to place the interest of the Fund first, ahead of
their own interests, in all personal trading scenarios that may involve a
conflict of interest with the Fund, consistent with its fiduciary duties under
applicable law.
(h) REPRESENTATIONS. The representations and warranties in this
Section 7 shall be deemed to be made on the date this Agreement is executed and
at the time of delivery of the quarterly compliance report required by Section
3(a), whether or not specifically referenced in such report.
8. THE NAME "XXXXXX". The Adviser grants to the Trust a license to
use the name "Xxxxxx" (together with any derivative or logo relating thereto,
the "NAME") as part of the name of the Fund. The foregoing authorization by the
Adviser to the Trust to use the Name as part of the name of the Fund is not
exclusive of the right of the Adviser itself to use, or to authorize others to
use, the Name; the Trust acknowledges and agrees that, as between the Trust and
the Adviser, the Adviser has the right to use, or authorize others to use, the
Name. The Trust shall (1) only use the Name in a manner consistent with uses
approved by the Adviser; (2) use its best efforts to maintain the quality of
the services offered using the Name; (3) adhere to such other specific quality
control standards as the Adviser may from time to time promulgate. At the
request of the Adviser, the Trust will (a) submit to Adviser representative
samples of any promotional materials using the Name; and (b) change the name of
the Fund, and cease to use any derivative or logo relating thereto, following
the termination of this Agreement; provided, however, that the Trust may
continue to use beyond such date any supplies of prospectuses, marketing
materials and similar documents that the Trust had on the date of such name
change, in quantities not exceeding those historically produced and used in
connection with the Fund to the extent required to do so by applicable law.
9. ADVISER'S COMPENSATION. The Fund shall pay to the Adviser, as
compensation for the Adviser's services hereunder, a monthly net asset-based
annual fee (the "Management Fee") and a quarterly performance based incentive
fee (the "Incentive Fee"), each determined as described in the Schedule A that
is attached hereto and made a part hereof.
In the event of termination of this Agreement, the fee provided in
this Section shall be computed on the basis of the period ending on the last
business day on which this Agreement is in effect subject to a pro rata
adjustment based on the number of days elapsed in the current month or calendar
quarter (as applicable) as a percentage of the total number of days in such
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month or calendar quarter (as applicable).
(a) MANAGEMENT FEE. The Management Fee shall be applied to the
Fund's NAV (before deduction of any Incentive Fee and the repurchase of shares
pursuant to a periodic repurchase offer). The Management Fee will be accrued at
least weekly and paid monthly in arrears by the Fund.
The method for determining net assets of the Fund for purposes hereof
shall be the same as the method for determining net assets for purposes of
establishing the offering and redemption prices of Fund shares as described in
the Fund's prospectus.
(b) INCENTIVE FEE. The Incentive Fee shall be paid to the Adviser
quarterly in arrears. The Incentive Fee shall generally be accrued as of the end
of each business day, equal to a percentage, described in Schedule A, of the
"Investment Profits" (as defined below), attributable to each share for such
calendar quarter, provided however that an Incentive Fee with respect to a share
will be paid only with respect to Investment Profits for the applicable calendar
quarter in excess of Unrecouped Investment Losses (as defined below) as of the
end of the previous calendar quarter. For the avoidance of doubt, the Adviser
does not need to "earn back" Incentive Fees previously paid to it in order to
recognize profits subject to additional Incentive Fees.
The term "Investment Profits" refers to an increase in the NAV of a
share attributable to the net realized and unrealized gains arising from the
Fund's investment activities during the calendar quarter (after deducting (i)
interest earned on, and net realized and unrealized gains arising from the
Fund's cash balances and fixed income investments held for cash management
purposes during the calendar quarter and (ii) any Management Fee accrued during
the calendar quarter and after adjusting for any repurchase of shares made
during the calendar quarter). The term "Unrecouped Investment Losses" refers to
any decrease in the NAV of a share attributable to the net realized and
unrealized losses arising from the Fund's investment activities (after
deducting (i) interest earned on, and net realized and unrealized gains arising
from the Fund's cash balances and fixed income investments held for cash
management purposes during the calendar quarter and (ii) any Management Fee
accrued during the calendar quarter and after adjusting for any repurchase of
shares made during the calendar quarter) that have not been offset by
subsequent Investment Profits since the formation of the Fund.
10. INDEPENDENT CONTRACTOR. In the performance of its duties
hereunder, the Adviser is and shall be an independent contractor and, unless
otherwise expressly provided herein or otherwise authorized in writing, shall
have no authority to act for or represent the Trust or the Fund in any way or
otherwise be deemed to be an agent of the Trust or the Fund. If any occasion
should arise in which the Adviser gives any advice to its clients concerning
the shares of the Fund, the Adviser will act solely as investment counsel for
such clients and not in any way on behalf of the Fund.
11. ASSIGNMENT AND AMENDMENTS. This Agreement shall automatically
terminate, without the payment of any penalty, in the event of its assignment
(as defined in section 2(a)(4)
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of the 1940 Act); provided that such termination shall not relieve any party of
any liability incurred hereunder.
This Agreement may not be added to or changed orally and may not be
modified or rescinded except by way of an amendment in writing signed by the
parties hereto and in accordance with the 1940 Act, when applicable.
12. DURATION AND TERMINATION.
This Agreement shall become effective as of the date executed and
shall remain in full force and effect continually thereafter, subject to
renewal as provided in Section 12(c) and unless terminated automatically as set
forth in Section 11 hereof or until terminated as follows:
(a) The Trust may cause this Agreement to terminate either (i) by
vote of its Board or (ii) with respect to the Fund, upon the affirmative vote
of a majority of the outstanding voting securities of the Fund; or
(b) The Adviser may at any time terminate this Agreement by not more
than sixty (60) days' nor less than thirty (30) days' written notice delivered
or mailed by registered mail, postage prepaid, to the Trust; or
(c) This Agreement shall automatically terminate two years from the
date of its execution unless its renewal is specifically approved at least
annually thereafter by (i) a majority vote of the Trustees, including a
majority vote of such Trustees who are not interested persons of the Trust or
the Adviser, at a meeting called for the purpose of voting on such approval; or
(ii) the vote of a majority of the outstanding voting securities of the Fund;
provided, however, that if the continuance of this Agreement is submitted to
the shareholders of the Fund for their approval and such shareholders fail to
approve such continuance of this Agreement as provided herein, the Adviser may
continue to serve hereunder as Adviser to the Fund in a manner consistent with
the 1940 Act and the rules and regulations thereunder; and
(d) Termination of this Agreement pursuant to this Section shall be
without payment of any penalty.
In the event of termination of this Agreement for any reason, the
Adviser shall, immediately upon notice of termination or on such later date as
may be specified in such notice, cease all activity on behalf of the Fund and
with respect to any of its assets, except as otherwise required by any
fiduciary duties of the Adviser under applicable law. In addition, the Adviser
shall deliver the Fund Books and Records to the Trust by such means and in
accordance with such schedule as the Trust shall direct and shall otherwise
cooperate, as reasonably directed by the Trust, in the transition of portfolio
asset management to any successor of the Adviser.
13. CERTAIN DEFINITIONS. For the purposes of this Agreement:
(a) "Affirmative vote of a majority of the outstanding voting
securities of the Fund" shall have the meaning as set forth in the 1940 Act,
subject, however, to such
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exemptions as may be granted by the Commission under the 1940 Act or any
interpretations of the Commission staff.
(b) "Interested persons" and "Assignment" shall have their respective
meanings as set forth in the 1940 Act, subject, however, to such exemptions as
may be granted by the Commission under the 1940 Act or any interpretations of
the Commission staff.
14. LIABILITY OF THE ADVISER.
(a) The Adviser shall have responsibility for any breach of the
representation and warranty in section 7(c) in respect of the Fund's Disclosure
Documents.
(b) The Adviser shall be liable to the Fund for any loss (including
reasonable transaction costs) incurred by the Fund attributable to the Adviser's
willful misfeasance, bad faith, gross negligence or its reckless disregard of
its obligations hereunder as a result of any investment made by the Adviser in
contravention of: (i) any investment policy, guideline or restriction set forth
in the Registration Statement or as approved by the Board from time to time and,
in each case, previously agreed with the Adviser via Adviser's consent to file
such Registration Statement; or (ii) applicable law, including but not limited
to the 1940 Act and the Code (including but not limited to the Fund's failure to
satisfy the diversification or source of income requirements of Subchapter M of
the Code), (the investments described in this section (b) defined collectively
as the "IMPROPER INVESTMENTS").
(c) To the fullest extent permitted by applicable law, none of the
Adviser, any affiliated person of the Adviser within the meaning of Section
2(a)(3) of the 1940 Act, nor any person who controls the Adviser within the
meaning of Section 15 of the 1933 Act (each, an "ADVISER PARTY") shall be
liable to the Trust or the Fund for any losses, claims, damages, expenses or
liabilities arising from any act or omission performed or omitted by it in
connection with this Agreement or the Fund's business or affairs except for any
such losses, claims, damages, expenses or liabilities that result directly from
such Adviser Party's willful misfeasance, bad faith or gross negligence or
reckless disregard of the Adviser's obligations hereunder.
(d) The Adviser shall indemnify and hold harmless the Trust, each
affiliated person of the Trust within the meaning of Section 2(a)(3) of the
1940 Act, and each person who controls the Trust within the meaning of Section
15 of the 1933 Act (any such person, an "ADVISER INDEMNIFIED PARTY") against
any and all losses, claims, damages, expenses or liabilities (including the
reasonable cost of investigating and defending any alleged loss, claim, damage,
expense or liability and reasonable counsel fees incurred in connection
therewith) to which any such person may become subject under the 1933 Act, the
1934 Act, the 1940 Act or other federal or state statutory law or regulation,
at common law or otherwise, insofar as such losses, claims, damages, expenses
or liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any Improper Investment; or (ii) any breach by the Adviser of the
representation and warranty in section 7(c); provided, however, that the
Adviser Indemnified Parties shall not be
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indemnified for any liability or expenses to the Trust to which such
Indemnified Party would otherwise be subject by reason of such Adviser
Indemnified Party's willful misfeasance, bad faith, gross negligence or
reckless disregard of its duties hereunder.
15. CONFIDENTIALITY. Neither party will disclose or use any records
or information obtained pursuant to this Agreement in any manner whatsoever
except as expressly authorized in this Agreement or as reasonably required to
execute transactions on behalf of the Fund or as otherwise required by
applicable law or regulation, and each party will keep confidential any
non-public information obtained directly as a result of this relationship, and
such party shall disclose such non-public information only if the other party
authorized such disclosure by prior written consent, or if such information is
or hereafter otherwise is known by such party or has been disclosed, directly
or indirectly, by the other party to others, or becomes ascertainable from
public or published information or trade sources, or if such disclosure is
expressly required or requested by applicable regulatory authorities, or to the
extent such disclosure is reasonably required by auditors or attorneys of such
party in connection with the performance of their professional services or as
may otherwise be contemplated by this Agreement. Neither party shall disclose
information regarding the Fund's trading history, portfolio holdings,
performance information or any other related information to any third-party,
except in compliance with the Trust's policies on disclosure of portfolio
holdings or as required by applicable law or regulation.
16. NON-EXCLUSIVITY. The services furnished by the Adviser under this
Agreement are not to be deemed exclusive, and except as the Adviser may
otherwise agree in writing, the Adviser shall be free to furnish similar
services to others. Nothing in this Agreement shall limit or restrict the right
of any director, officer or employee of the Adviser to engage in any other
business or to devote his or her time and attention in part to the management
or other aspects of any other business, whether of a similar nature or a
dissimilar nature.
17. CHANGE IN THE ADVISER'S OWNERSHIP. The Adviser agrees that it
shall notify the Trust of any anticipated or otherwise reasonably foreseeable
change in the ownership of the Adviser within a reasonable time prior to such
change being effected.
18. ENFORCEABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
19. LIMITATION OF LIABILITY. The parties to this Agreement
acknowledge and agree that all litigation arising hereunder, whether direct or
indirect, and of any and every nature whatsoever shall be satisfied solely out
of the assets of the affected Fund and that no Trustee, officer or holder of
shares of beneficial interest of the Fund shall be personally liable for any of
the foregoing liabilities. The Trust's Certificate of Trust, as amended from
time to time, is on file in the Office of the Secretary of State of Delaware.
Such Certificate of Trust and the Trust's Agreement and Declaration of Trust
describe in detail the respective responsibilities and limitations on liability
of the Trustees, officers, and holders of shares of beneficial interest.
11
20. JURISDICTION. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York and the Adviser
consents to the jurisdiction of courts, both state or federal, in the State of
New York, with respect to any dispute under this Agreement.
21. PARAGRAPH HEADINGS. The headings of paragraphs contained in this
Agreement are provided for convenience only, form no part of this Agreement and
shall not affect its construction.
22. COUNTERPARTS. 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. Signatures on this
Agreement may be communicated by electronic transmission (which shall include
facsimile or email) and shall be binding upon the parties so transmitting their
signatures.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be signed on their behalf by their duly authorized officers as of the date
first above written.
XXXXXX DIVERSIFIED OPPORTUNITIES FUND
By: /s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: President
XXXXXX CAPITAL US LLC
By: /s/ Xxxxxx Rentoul
Name: Xxxxxx Rentoul
Title: Director of Xxxxxx Capital Group
Limited, Sole member of Xxxxxx
Capital US LLC
12
SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
DATED SEPTEMBER 11, 0000 XXXXXXX
XXXXXX DIVERSIFIED OPPORTUNITIES FUND
AND
XXXXXX CAPITAL US LLC
The Trust will pay to the Adviser as compensation for the Adviser's services
rendered a Management Fee and an Incentive Fee at the following rates:
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FUND FEE RATE
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Xxxxxx Diversified Opportunities Fund Management Fee 1.25% of the average net assets
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Xxxxxx Diversified Opportunities Fund Incentive Fee 20% of the Investment Profits
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