Exhibit 99.2(g)(i)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made as of the [__] day of [ ], 2003, by and between ASA
MARKET NEUTRAL EQUITY FUND LLC, an Illinois limited liability company (the
"Fund") and ASPEN STRATEGIC ALLIANCE LLC, a Delaware limited liability company
(the "Investment Adviser").
W I T N E S S E T H
-------------------
WHEREAS, the Fund is engaged in business as a closed-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act"); and
WHEREAS, the Investment Adviser is engaged principally in rendering
management and investment advisory services under the Investment Advisers Act
of 1940, as amended; and
WHEREAS, the Fund desires to retain the Investment Adviser to provide
management and investment advisory services to the Fund 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 Fund on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and the covenants
hereinafter contained, the Fund and the Investment Adviser hereby agree as
follows:
ARTICLE I.
----------
Duties of the Investment Adviser
--------------------------------
The Fund hereby employs the Investment Adviser to act as manager and
investment adviser of the Fund and to furnish, or arrange for its affiliates
to furnish, the management and investment advisory services described below,
subject to the policies of, review by and overall control of the Board of
Directors of the Fund, for the period and on the terms and conditions set
forth in this Agreement. 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 and its
affiliates for all purposes herein shall be deemed to be independent
contractors and, unless otherwise expressly provided or authorized, shall have
no authority to act for or represent the Fund in any way or otherwise be
deemed agents of the Fund. The Investment Adviser shall at all times conform
to and use its best efforts to enable the Fund to conform to (i) the
provisions of the Investment Company Act and any rules or regulations
thereunder, (ii) any other applicable provisions of federal or state law,
(iii) the provisions of the limited liability company operating agreement of
the Fund, as amended from time to time (the "Operating Agreement"), (iv)
policies and determinations of the Board of Directors of the Fund and (v) the
Prospectus and Statement of Additional Information of the Fund, as the same
may be amended from time to time.
(a) Management and Administrative Services. The Investment Adviser shall
perform, or arrange for its affiliates to perform, the management and
administrative services necessary for the operation of the Fund, including
administering shareholder accounts and handling
2
shareholder relations. The Investment Adviser shall provide the Fund with
office space, facilities, equipment and necessary personnel and such other
services as the Investment Adviser, subject to review by the Board of
Directors, from time to time determine to be necessary or useful to perform
its obligations under this Agreement. The Investment Adviser, also on behalf
of the Fund, 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 and such
other capacity deemed to be necessary or desirable. The Investment Adviser
generally shall monitor the Fund's compliance with investment policies and
restrictions as set forth in filings made by the Fund under the federal
securities laws. The Investment Adviser shall make reports to the Board of
Directors of its performance of obligations hereunder and furnish advice and
recommendations with respect to such other aspects of the business and affairs
of the Fund as it shall determine to be desirable.
(b) Investment Advisory Services. The Investment Adviser shall provide,
or arrange for its affiliates to provide, the Fund with such investment
research, advice and supervision as the latter from time to time may consider
necessary for the proper supervision of the assets of the Fund, shall furnish
continuously an investment program for the Fund and shall determine from time
to time which securities shall be purchased, sold or exchanged and what
portion of the assets of the Fund shall be held in the various securities in
which the Fund invests, options, futures, options on futures or cash, subject
always to the restrictions of the Operating Agreement of the Fund, the
provisions of the Investment Company Act and the statements relating to the
Fund's investment objectives, investment policies and investment restrictions
as the same set forth in filings made by the Fund under the federal securities
laws. The Investment Adviser shall
3
manage the Fund's portfolio, on a discretionary basis, through selecting,
allocating and reallocating the Fund's assets among various professional
investment managers ("Portfolio Managers"). The Investment Adviser shall
invest the Fund's assets through investing in limited partnerships, limited
liability companies, business trusts and similar business vehicles managed by
the Portfolio Managers whose primary business is investing in securities and
other financial instruments but that are not registered or required to
register as investment companies under the Investment Company Act by virtue of
the exclusion from the definition of "investment company" provided by Section
3(c)(1) or Section 3(c)(7) of the Investment Company Act ("Portfolio Funds"),
certain of which are separate investment vehicles created for a Portfolio
Manager for the purpose of permitting the Fund to place assets under the
management of a particular Portfolio Manager on a limited liability basis
("Portfolio Accounts"). The Investment Adviser may determine from time to time
to allocate assets of the Fund to registered investment companies, to the
extent permitted by the Investment Company Act. The Investment Adviser shall
make decisions for the Fund as to the manner in which voting rights, rights to
consent to corporate action and any other rights pertaining to the Fund's
portfolio securities shall be exercised. Should the Board of Directors 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 monitor the performance of each Portfolio
Manager, select new Portfolio Managers, terminate existing Portfolio Managers
and allocate and reallocate the Fund's assets among Portfolio Managers as the
Investment Adviser deems appropriate. The Investment Adviser will from time to
time evaluate and, as appropriate, recommend changes to the Fund's investment
strategy to the
4
Board of Directors. The Investment Adviser shall take, on behalf of the Fund,
all actions which it deems necessary to implement the investment policies
determined as provided above, and in particular to place all orders for the
purchase or sale of portfolio securities for the Fund's account with brokers
or dealers selected by it, and to that end, the Investment Adviser is
authorized as the agent of the Fund to give instructions to the custodian of
the Fund as to deliveries of securities and payments of cash for the account
of the Fund. In connection with the selection of such brokers or dealers and
the placing of such orders with respect to the assets of the Fund, the
Investment Adviser is directed at all times to seek to obtain execution and
prices within the policy guidelines determined by the Board of Directors and
set forth in filings made by the Fund under the federal securities laws.
Subject to this requirement and the provisions of the Investment Company Act,
the Securities Exchange Act of 1934, as amended, and other applicable
provisions of law, the Investment Adviser may select brokers or dealers with
which it or the Fund is affiliated. The Investment Adviser shall periodically
report to the Board of Directors concerning the performance of the Fund's
investments. Such reporting shall be both sufficiently frequent and detailed
to permit the Fund to comply with its obligations under the Investment Company
Act and the Fund's Prospectus. The Fund acknowledges that the Investment
Adviser's ability to provide timely and accurate reports is dependent upon the
Investment Adviser's receipt of timely and accurate performance information
from Portfolio Managers, banks, brokers and dealers.
(c) Sub-Advisers. In carrying out its responsibilities hereunder, the
Investment Adviser may appoint, employ, retain or otherwise avail itself of
the services of other persons or entities including, without limitation,
subsidiaries and affiliates of the Investment Adviser, on such terms as the
Investment Adviser shall determine to be necessary, desirable or appropriate,
to render
5
investment advisory services to the Fund (each a "Subadviser"), provided that
such appointment of a Subadviser shall be subject to (i) the approval of the
Fund's Board of Directors and (ii) to the extent required by applicable law,
the approval of the vote of the holders of a majority of the outstanding
voting securities of the Fund. Retention of one or more Subadvisers 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 Subadvisers in connection with the performance of
the Investment Adviser's duties hereunder.
ARTICLE II.
-----------
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 Article I hereof. The Investment
Adviser shall pay, or cause affiliates to pay, compensation of all officers of
the Fund and all Directors of the Fund who are affiliated persons of the
Investment Adviser or any Subadviser, or an affiliate of the Investment
Adviser or any Subadviser.
(b) The Fund. The Fund assumes, and shall cause to pay or cause to be
paid, all other expenses of the Fund including, without limitation: taxes;
investment-related expenses incurred by the Fund (including but not limited to
fees and expenses charged by the Portfolio Managers or the Portfolio Funds,
costs associated with organizing and operating Portfolio Accounts, placement
fees, interest on indebtedness, fees for data and software providers, research
expenses,
6
professional fees (including, without limitation, expenses of consultants and
experts relating to investments); fees and expenses for accounting and custody
services; the fees and expenses of Fund counsel, any legal counsel retained to
represent the independent Directors of the Fund and the independent auditors
of the Fund; costs associated with the registration of the Fund, including the
costs of compliance with federal and state laws; costs and expenses of holding
meetings of the Board and meetings of members of the Fund, including
reasonable travel and out-of-pocket expenses of the Members of the Board and
any costs associated with the preparation and dissemination of proxy
materials; the costs of a fidelity bond and any liability insurance obtained
on behalf of the Fund or the Board; the costs of preparing, printing and
distributing reports and other communications to members of the Fund and such
other expenses as may be approved by the Board.
ARTICLE III.
------------
Compensation of the Investment Adviser
--------------------------------------
(a) For the services rendered hereunder, the facilities furnished and the
expenses assumed by the Investment Adviser, the Fund shall pay to the
Investment Adviser a fee (the "Management Fee") monthly in arrears based upon
the aggregate value of the outstanding Interests, determined as of the last
business day of the previous month, at the annual rate of 1.5% of the
aggregate value of the outstanding Interests. The value of the Interests shall
be determined pursuant to the applicable provisions of the Operating
Agreement, valuation procedures and Prospectus and Statement of Additional
Information of the Fund, each as amended from time to time. The Management Fee
shall be calculated on a pro rata basis in the case of any partial
7
months. Payment of the Management Fee for the preceding month shall be made as
promptly as possible after completion of the computations contemplated herein.
ARTICLE IV.
-----------
Limitation of Liability of the Investment Adviser
-------------------------------------------------
The Investment Adviser shall not be liable for any error of judgment or
mistake of law or for any damage or loss arising out of any investment or for
any act or omission in the management of the Fund, including but not limited
to any damage or loss incurred by the Fund, any Portfolio Manager or Portfolio
Fund, the Board, any sub-adviser, the Fund's custodian or administrator, any
bank, broker or dealer, or any agent, partner, director, officer or employee
of any of them, unless such loss arises from the Investment Adviser's willful
malfeasance, bad faith or gross negligence in the performance of its duties,
or by reason of reckless disregard of its obligations and duties hereunder.
The Investment Adviser makes no representation or warranty (i) as to the
accomplishment of any particular investment results by any Portfolio Manager
or Portfolio Fund or the Fund's portfolio as a whole, or (ii) as to the
accuracy or completeness of any information supplied by the Adviser to the
Fund or the Fund's custodian or administrator which is provided by any
Portfolio Manager, Portfolio Fund or other third-party to the Investment
Adviser and conveyed by the Investment Adviser (either in its entirety or in
excerpted format to any or all of them).
ARTICLE V.
----------
Activities of the Investment Adviser
------------------------------------
8
The services of the Investment Adviser to the Fund are not to be deemed
to be exclusive; the Investment Adviser and any person controlled by or under
common control with the Investment Adviser (for purposes of this Article V
referred to as "affiliates') are free to render investment advisory services
to others, provided that such activities do not in the Investment Adviser's
judgment adversely affect or otherwise impair the performance by the
Investment Adviser of its duties and obligations under this Agreement or under
the Investment Company Act. The Investment Adviser and its affiliates may
recommend to any other person or advisory client a particular Portfolio
Manager or strategy that they do not select for the Fund.
ARTICLE VI.
Duration and Termination of this Agreement
This Agreement shall become effective as of the date first above written
and shall remain in force for a period of two years thereafter 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 Directors of the Fund, or by
the vote of a majority of the outstanding voting securities of the Fund, and
(ii) a majority of those Directors 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.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Board of Directors or by a vote of a majority of the
outstanding voting securities of the Fund, or by the Investment Adviser, on
sixty (60) days' written notice to the other party. This Agreement shall
terminate automatically in the event of its assignment, provided that an
assignment to a corporate successor to all or substantially all of the
Investment Adviser's business or to a wholly owned subsidiary of such
corporate successor which does not result in
9
change of actual control or management of the Investment Adviser's business
shall not be deemed an assignment for purposes of this paragraph.
ARTICLE VII.
------------
Amendment of this Agreement
---------------------------
This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of the Board of Directors of the Fund,
including a majority of those Directors 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 Investment
Company Act, by the vote of a majority of the outstanding voting securities of
the Fund.
ARTICLE VIII.
-------------
Definitions of Certain Terms
----------------------------
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 Investment
Company 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.
ARTICLE IX.
-----------
Use of Name
-----------
10
The Investment Adviser hereby grants the Fund a royalty-free,
non-exclusive right and license to use the names "Aspen" and/or "ASA" (i) in
the name of the Fund and (ii) in connection with the Fund's investment
products and services, in each case only for the duration of this Agreement
and any extension or renewal thereof. Such license may, upon termination of
this Agreement, be terminated by the Investment Adviser, in which event the
Fund shall promptly take whatever action may be necessary to change its name
and discontinue any further use of the names "Aspen" and "ASA" in the name of
the Fund or otherwise. The names "Aspen" or "ASA" may be used or licensed by
the Investment Adviser and its affiliates in connection with any of their
activities, or licensed by the Investment Adviser to any other party.
ARTICLE X.
----------
Governing Law
-------------
This Agreement shall be governed by and 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.
11
ARTICLE XI.
-----------
Miscellaneous Provisions
------------------------
(a) 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, and, to this extent, the
provisions of this Agreement shall be deemed to be so severable.
(b) Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, and it shall not
be necessary in making proof of this Agreement to produce or account for more
than one such counterpart.
12
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
ASA MARKET NEUTRAL EQUITY
FUND LLC
By:
-----------------------------
Name:
Title:
ASPEN STRATEGIC ALLIANCE LLC
By:
-----------------------------
Name:
Title:
13
