Exhibit (g)
INVESTMENT ADVISORY AGREEMENT
by and between
CSFB ALTERNATIVE CAPITAL MULTI-STRATEGY FUND, LLC
CSFB ALTERNATIVE CAPITAL MULTI-STRATEGY INSTITUTIONAL FUND, LLC
and
CSFB ALTERNATIVE CAPITAL, INC.
AGREEMENT made as of the 28th day of March, 2005 between CSFB Alternative
Capital, Inc., a corporation organized under the laws of the State of Delaware
(the "Adviser"), and each of CSFB Alternative Capital Multi-Strategy Fund, LLC
and CSFB Alternative Capital Multi-Strategy Institutional Fund, LLC, each a
limited liability company organized under the laws of the State of Delaware
(each a "Company" and together, the "Companies").
RECITALS
WHEREAS, each Company is engaged in business as a closed-end,
non-diversified, 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
management and advisory services and is registered under the Investment
Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, each Company desires to retain the Adviser to render
management and investment advisory services in the manner and on the
terms and conditions hereinafter set forth; and
WHEREAS, the Adviser desires to be retained to perform services on
said terms and conditions;
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the
parties hereto as follows:
1. Appointment of the Adviser.
The Board of Managers of each Company (collectively the "Board" and
individually a "Manager") hereby appoints the Adviser to act as manager and
investment adviser for each Company 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.
1
2. Duties and Responsibilities of the Adviser.
(a) Investment Advisory Services.
The Adviser shall:
(i) develop, implement and supervise a continuous investment program for
each Company in a manner consistent with the investment objectives and
policies of the Companies;
(ii) provide advice and recommendations to each Company with respect to its
investments, investment policies and purchases and sales of securities;
(iii) arrange for the purchase and sale of such securities with the
Company's administrator;
(iv) to the extent allowed by the 1940 Act, the rules and regulations
thereunder, and exemptive, interpretive or other relief thereunder,
specifically allocate each Companies assets among one or more registered
investment company investments as consistent with each Company's investment
objective;
(v) to the extent allowed by the 1940 Act, the rules and regulations
thereunder, and exemptive, interpretive or other relief thereunder,
specifically reallocate each Company's assets among one or more registered
investment company investments, redeem the Company's investments with such
investment company or companies and select additional investment company
investments subject in each case to the ultimate supervision of, and any
polices established by, the Board; and
(vi) take such further action as it shall deem necessary or appropriate in
its capacity as Adviser.
The Adviser is authorized, subject to the approval of the Board and
interest holders of each Company (the "Interest holders"), to retain one of its
affiliates to provide any or all of the investment advisory services required to
be provided to a Company or to assist the Adviser in providing these services,
subject to the requirement that the Adviser supervise the rendering of any such
services to each Company by its affiliates.
(b) Reports to a Company.
The Adviser shall furnish to or place at the disposal of each Company such
information, reports, evaluations, analyses and opinions as the Company may, at
any time or from time to time, reasonably request or as the Adviser may deem
helpful to the Company.
3. Allocation of Expenses.
(a) Expenses Paid by Adviser.
2
The Adviser shall bear the cost of rendering the investment management and
supervisory services.
(b) Expenses Paid by a Company.
Each Company assumes and shall pay or cause to be paid directly or
indirectly all other expenses of the Company, including without limitation: all
costs and expenses directly related to portfolio transactions and positions for
the Company's account, including, but not limited to, brokerage commissions;
redemption fees; fees paid to the underlying investment companies including
management and performance fees, if any; custodial fees, margin fees, transfer
taxes and premiums, taxes withheld on foreign dividends and indirect expenses
from investments in portfolio securities; all costs and expenses associated with
the registration of the Company under, and compliance with, any applicable
federal or state laws; attorneys' fees and disbursements associated with
updating the Company's registration statement, prospectus, statement of
additional information and other offering related documents; Board compensation;
the costs and expenses of holding meetings of the Board and any meetings of
Interest holders of the Company, including legal costs associated with the
preparation and filing of proxy materials; the fees and disbursements of the
Company's counsel, legal counsel to the Company, legal counsel to the Board
Managers who are not "interested persons" (as that term is defined in the ▇▇▇▇
▇▇▇) of the Company or the Adviser ("Independent Managers"), independent
accounts for the Company and other consultants and professionals engaged on
behalf of the Company; accounting and auditing expenses; the fees and expenses
payable to various service providers including but not limited to the Company's
administrator, custodian, auditors and escrow agent pursuant to the Company's
agreements with those providers (which providers may include the Adviser); the
costs of a fidelity bond and any liability insurance obtained on behalf of the
Company, the Board, its officers, or the Adviser; all costs and expense of
preparing, setting in type, printing and distributing reports and other
communications to the Interest holders of the Company; all expenses of computing
the Company's net asset value, including any equipment or services obtained for
these purposes; all charges for equipment or services used in communicating
information regarding the Company's transactions among the Adviser and any
custodian or other agent engaged by the Company; any extraordinary expenses it
may incur, including any litigation expenses, subject to Board approval; and
such other types of expenses as may be approved from time to time by the Board.
4. Compensation.
(a) A Company shall not be obligated to pay the Adviser directly for the
services to be provided by the Adviser, as provided in Paragraphs 2 and 3(a)
hereof, so long as the Company invests in an underlying investment company or
companies to which the Adviser, or an affiliated person(s), provides investment
advisory services. By investing in such an underlying investment company, the
Company shall instead bear a portion of the fee paid to the Adviser, or its
affiliated person(s), by the underlying investment company or companies.
3
(b) In the event this Agreement is terminated as of a date other than the
last day of any quarter, a Company shall pay the Adviser a pro rata portion of
the amount that the Company would have been required to pay, if any, had this
Agreement remained in effect for the full quarter.
5. Company Transactions.
In connection with the management of the investment and reinvestment, if
any, of the assets of each Company, the Adviser is authorized and directed to
use its best efforts to seek the best overall terms available. To the extent
that a Company undertakes any transaction other than investment in an investment
company or companies, in assessing the best overall terms available for any
transaction, the Adviser shall consider all factors it deems relevant, including
the breadth of the market and the price of the security and the reasonableness
of the terms and conditions, if any, with respect to the Company's investment.
6. Ownership of Records.
All records required to be maintained and preserved by each Company
pursuant to the provisions of rules or regulations of the SEC under Section
31(a) of the 1940 Act and maintained and preserved by the Adviser on behalf of a
Company are the property of the Company and will be surrendered by the Adviser
promptly upon request by the Company.
7. Relations with a Company.
Subject to and in accordance with the Limited Liability Company Agreements
("LLC Agreements") of each Company, it is understood that Board managers,
Interest holders and agents of the Company are or may be interested in the
Adviser (or any successor thereof) as managers, Interest holders or otherwise,
that managers, Interest holders or agents of the Adviser are or may be
interested in a Company as Board managers or Interest holders or otherwise, that
the Adviser (or any such successor) is or may be interested in the Company as an
Interest holder or otherwise and that the effect of any such Interests shall be
governed by such LLC Agreements.
8. Liability of the Adviser.
In the absence of (a) willful misfeasance, bad faith or gross negligence on
the part of the Adviser in performance of its obligations and duties hereunder,
(b) reckless disregard by the Adviser of its obligations and duties hereunder,
or (c) a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services (in which case any award of damages shall
be limited to the period and the amount set forth in Section 36(b)(3) of the
1940 Act), the Adviser shall not be subject to any liability whatsoever to the
Company, or to any member of a Company (each, a "Member," and collectively, the
"Members") for any error of judgment, mistake of law or any other act or
omission in the course of, or connected with, rendering services hereunder
including, without limitation,
4
for any losses that may be sustained in connection with the purchase, holding,
redemption or sale of any security on behalf of a Company.
9. Indemnification
(a) To the fullest extent permitted by law, a Company shall, subject to
Section 9(c) of this Agreement, indemnify the Adviser (including for this
purpose each officer, director, partner, principal, employee or agent of, or any
person who controls, is controlled by or is under common control with, the
Adviser, and their respective executors, heirs, assigns, successors or other
legal representatives) (each such person being referred to as an "indemnitee")
against all losses, claims, damages, liabilities, costs and expenses arising by
reason of being or having been Adviser to the Company, or the past or present
performance of services to the Company in accordance with this Agreement by the
indemnitee, except to the extent that the loss, claim, damage, liability, cost
or expense has been finally determined in a judicial decision on the merits from
which no further appeal may be taken in any action, suit, investigation or other
proceeding to have been incurred or suffered by the indemnitee by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of the indemnitee's office. These losses, claims,
damages, liabilities, costs and expenses include, but are not limited to,
amounts paid in satisfaction of judgments, in compromise, or as fines or
penalties, and counsel fees and expenses, incurred in connection with the
defense or disposition of any action, suit, investigation or other proceeding,
whether civil or criminal, before any judicial, arbitral, administrative or
legislative body, in which the indemnitee may be or may have been involved as a
party or otherwise, or with which such indemnitee may be or may have been
threatened, while in office or thereafter. The rights of indemnification
provided under this Section 9 are not to be construed so as to provide for
indemnification of an indemnitee for any liability (including liability under
U.S. federal securities laws which, under certain circumstances, impose
liability even on persons that act in good faith) to the extent (but only to the
extent) that indemnification would be in violation of applicable law, but shall
be construed so as to effectuate the applicable provisions of this Section 9.
(b) Expenses, including counsel fees and expenses, incurred by any
indemnitee (but excluding amounts paid in satisfaction of judgments, in
compromise, or as fines or penalties) may be paid from time to time by a Company
in advance of the final disposition of any action, suit, investigation or other
proceeding upon receipt of an undertaking by or on behalf of the indemnitee to
repay to the Company amounts paid if a determination is made that
indemnification of the expenses is not authorized under Section 9(a) of this
Agreement, so long as (i) the indemnitee provides security for the undertaking,
(ii) the Company is insured by or on behalf of the indemnitee against losses
arising by reason of the indemnitee's failure to fulfill his, her or its
undertaking, or (iii) a majority of the Independent Managers of the Company
(excluding any Manager who is or has been a party to any other action, suit,
investigation or other proceeding involving claims similar to those involved in
the action, suit, investigation or proceeding giving rise to a claim for
advancement of expenses under this Agreement) or independent legal counsel in a
written opinion determines based on a review of readily available facts (as
opposed to a full trial-
5
type inquiry) that reason exists to believe that the indemnitee ultimately shall
be entitled to indemnification.
(c) As to the disposition of any action, suit, investigation or other
proceeding (whether by a compromise payment, pursuant to a consent decree or
otherwise) without an adjudication or a decision on the merits by a court, or by
any other body before which the proceeding has been brought, that an indemnitee
is liable to a Company or its Members by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of the indemnitee's office, indemnification shall be provided in
accordance with Section 9(a) of this Agreement if (i) approved as in the best
interests of the Company by a majority of the Independent Managers (excluding
any Manager who is or has been a party to any other action, suit, investigation
or other proceeding involving claims similar to those involved in the action,
suit, investigation or proceeding giving rise to a claim for indemnification
under this Agreement) upon a determination based upon a review of readily
available facts (as opposed to a full trial-type inquiry) that the indemnitee
acted in good faith and in the reasonable belief that the actions were in the
best interests of the Company and that the indemnitee is not liable to the
Company or its Members by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of the
indemnitee's office, or (ii) the Managers secure a written opinion of
independent legal counsel based upon a review of readily available facts (as
opposed to a full trial-type inquiry) to the effect that indemnification would
not protect the indemnitee against any liability to the Company or its Members
to which the indemnitee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of the indemnitee's office.
(d) Any indemnification or advancement of expenses made in accordance with
this Section 9 shall not prevent the recovery from any indemnitee of any amount
if the indemnitee subsequently is determined in a final judicial decision on the
merits in any action, suit, investigation or proceeding involving the liability
or expense that gave rise to the indemnification or advancement of expenses to
be liable to a Company or its Members by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of the indemnitee's office. In any suit brought by an indemnitee to
enforce a right to indemnification under this Section 9 it shall be a defense
that, and in any suit in the name of the Company to recover any indemnification
or advancement of expenses made in accordance with this Section 9 the Company
shall be entitled to recover the expenses upon a final adjudication from which
no further right of appeal may be taken that, the indemnitee has not met the
applicable standard of conduct described in this Section 9. In any suit brought
to enforce a right to indemnification or to recover any indemnification or
advancement of expenses made in accordance with this Section 9, the burden of
proving that the indemnitee is not entitled to be indemnified, or to any
indemnification or advancement of expenses, under this Section 9 shall be on the
Company (or on any Member acting derivatively or otherwise on behalf of the
Company or its Members).
6
(e) An indemnitee may not satisfy any right of indemnification or
advancement of expenses granted in this Section 9 or to which he, she or it may
otherwise be entitled except out of the assets of the Company, and no Member
shall be personally liable with respect to any such claim for indemnification or
advancement of expenses.
(f) The rights of indemnification provided in this Section 9 shall not be
exclusive of or affect any other rights to which any person may be entitled by
contract or otherwise under law. Nothing contained in this Section 9 shall
affect the power of a Company to purchase and maintain liability insurance on
behalf of the Adviser or any indemnitee.
10. Duration and Termination of this Agreement.
(a) Duration.
This Agreement shall be executed and become effective on the first date
upon which the Agreement shall have been approved by a majority of the
outstanding voting interest as the term is defined in the ▇▇▇▇ ▇▇▇) of the
Company. Unless terminated as herein provided, this Agreement shall remain in
full force and effect through March 28, 2007 and shall continue in full force
and effect for periods of one year thereafter so long as such continuance is
approved at least annually by either, the Board, including a majority of the
Independent Managers (who are not a party to this) cast in person at a meeting
called for the purpose of voting on such approval or by a vote of a majority of
the outstanding voting interests (as defined in the ▇▇▇▇ ▇▇▇) of the Company.
Any approval of this Agreement by the holders of a majority of the
outstanding interests (as defined in the ▇▇▇▇ ▇▇▇) of the Company shall be
effective to continue this Agreement notwithstanding (a) that this Agreement has
not been approved by the holders of a majority of the outstanding interests of
the Company affected thereby, and (b) that this Agreement has not been approved
by the vote of a majority of the outstanding interests of the Company, unless
such approval shall be required by any other applicable law or otherwise.
(b) Termination.
This Agreement may be terminated at any time, without payment of any
penalty, by vote of the Board or by vote of a majority of the outstanding
interests (as defined in the ▇▇▇▇ ▇▇▇) of the Company or by the Adviser, on
sixty (60) days' written notice to the other party.
(c) Automatic Termination.
This Agreement shall automatically terminate in the event of its
"assignment" (as defined in the 1940 Act and rules thereunder) if consent to
such assignment is not obtained in accordance with subsection (d).
7
(d) Transfer or Assignment
This Agreement may not be transferred, assigned, sold or in any manner
hypothecated or pledged without the affirmative vote or written consent of the
holders of a majority of the outstanding voting interests of the Company or
series (if any).
11. Services Not Exclusive.
The services of the Adviser to a Company hereunder are not to be deemed
exclusive, and the Adviser shall be free to render similar services to others so
long as its services hereunder are not impaired thereby.
12. Use of Names.
The Adviser may act as investment adviser for any other person, firm or
corporation and use the names "CSFB", "CSFB Alternative Capital", "Credit Suisse
First Boston", "Credit Suisse", or "CS" in connection with other investment
companies, registered or unregistered, for which it or its affiliates may act as
investment adviser or general distributor. If the Adviser shall no longer act as
investment adviser of a Company, the Adviser may withdraw the right of the
Company to use the names "CSFB", "CSFB Alternative Capital", "Credit Suisse
First Boston", "Credit Suisse", or "CS" as part of its name, or in any other
manner.
13. Miscellaneous.
(a) Amendment of Agreement.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of the change, waiver, discharge or termination is
sought. No material amendment of this Agreement shall be effective until
approved in the manner required by the 1940 Act and rules thereunder or in
accordance with exemptive or other relief granted by the SEC or its staff.
(b) 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. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
(c) Governing Law.
This Agreement shall be construed in accordance with the laws of the State
of New York, without giving effect to the conflicts of laws principles thereof,
and in accordance
8
with the 1940 Act. To the extent that the applicable laws of the State of New
York conflict with the applicable provisions of the 1940 Act, the latter shall
control.
(d) 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.
(e) Headings.
The captions in this Agreement are included for convenience of reference
only and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect.
(f) Entire Agreement.
This Agreement states the entire agreement of the parties hereto, and is
intended to be the complete and exclusive statement of the terms hereof. It may
not be added to or changed orally, and may not be modified or rescinded except
by a writing signed by the parties hereto and in accordance with the 1940 Act.
(g) Notices.
Any notice under this Agreement shall be given in writing and shall be
deemed to have been duly given when delivered by hand, on the date indicated as
the date of receipt on a return receipt, or at a time of receipt if sent to the
other party at the principal office of such party or by regular mail,
commercially delivered.
(h) Liability of the Board of Managers and Interest Holders.
Any obligations of a Company under this Agreement are not binding upon the
Board of Managers or the Company's Interest holders individually but are binding
only upon the assets and property of the Company. The Adviser represents that it
has notice of the provisions of the Limited Liability Company Agreement of the
Company disclaiming Member and Manager liability for acts and obligations of the
Company.
(i) Form ADV; Company Changes.
Each Company acknowledges receiving Part II of the Adviser's Form ADV. The
Adviser covenants that it will notify the Company of any changes in the
membership of its officers within a reasonable time after such change.
9
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
CSFB Alternative Capital Multi-Strategy Fund, LLC
CSFB Alternative Capital Multi-Strategy Institutional Fund, LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Secretary
CSFB Alternative Capital, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Managing Direcctor
10