EFTA01197165.pdf

Name: Copy No. BOOTHBAY MULTI-STRATEGY FUND, LP CONFIDENTIAL PRIVATE OFFERING MEMORANDUM General Partner: Boothbay Hybrid GP, LLC Investment Manager: Boothbay Fund Management, LLC December 2012 EWAGNE1217652.1 - 11!29/12 EFTA01197165  Confidential Private Offering Memorandum BOOTHBAY MULTI-STRATEGY FUND, LP This Confidential Private Offering Memorandum (this "Memorandum") has been prepared solely for the information of the person to whom it has been delivered on behalf of Boothbay Multi-Strategy Fund, LP (the "Partnership") and may not be reproduced or used for any other purpose. Each person accepting this Memorandum agrees to return it to Boothbay Hybrid GP, LLC (the "General Partner") promptly upon request. This Memorandum does not constitute an offer or solicitation in any jurisdiction in which such an offer or solicitation is not authorized or permitted. The Partnership will not be registered as an investment company under the Investment Company Act of 1940, as amended. Neither the General Partner nor Boothbay Fund Management, LLC (the "Investment Manager") is registered as an investment adviser under the Investment Advisers Act of 1940, as amended, or under the laws of any other jurisdiction, although either entity may do so in the future. In making an investment decision, investors must rely upon their own examination of the Partnership and the terms of this offering, including the merits and risks involved. Neither the Securities and Exchange Commission ("SEC") nor any other state or federal governmental agency or any securities exchange has passed upon the accuracy or adequacy of this Memorandum or the merits of an investment in the limited partnership interests offered hereby. Any representation to the contrary is a criminal offense. The General Partner will make available to any prospective limited partner the opportunity to ask questions of and to receive answers from the General Partner and/or its agents concerning the Partnership and the terms and conditions of this offering and to obtain any additional relevant information to the extent the General Partner possesses such information or can obtain it without unreasonable effort or expense. The contents of this Memorandum should not be considered to be legal or tax advice and each prospective limited partner should consult with, and rely solely upon, his or her own counsel and advisers as to all matters concerning an investment in the Partnership. Prospective limited partners are urged to consult with, and rely solely upon, their legal and tax advisers before investing in limited partnership interests. ii EWAGNE1217652.1 - 11!29/12 EFTA01197166  NOTICES TO ALL INVESTORS: THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATES AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. THE INTERESTS ARE SUITABLE ONLY FOR SOPHISTICATED INVESTORS FOR WHICH AN INVESTMENT IN THE PARTNERSHIP DOES NOT CONSTITUTE A COMPLETE INVESTMENT PROGRAM AND THAT FULLY UNDERSTAND AND ARE WILLING TO ASSUME THE RISKS INVOLVED IN THE PARTNERSHIP'S SPECIALIZED INVESTMENT PROGRAM. INVESTMENT IN THE INTERESTS ENTAILS SIGNIFICANT INVESTMENT AND OTHER RISKS, INCLUDING POSSIBLE ADVERSE TAX EFFECTS. PLEASE REFER TO "CERTAIN RISK FACTORS," "OTHER ACTIVITIES OF THE GENERAL PARTNER, INVESTMENT MANAGER; CONFLICTS OF INTEREST' AND "INCOME TAX ASPECTS" SET FORTH IN THIS MEMORANDUM. INVESTORS SHOULD PURCHASE INTERESTS ONLY IF THEY HAVE THE FINANCIAL ABILITY AND WILLINGNESS TO ACCEPT THE RISKS AND LACK OF LIQUIDITY THAT ARE CHARACTERISTIC OF INVESTMENTS SUCH AS THE INTERESTS. THE INTERESTS ARE SUBJECT TO INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF THE AMOUNT INVESTED. THESE INTERESTS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM AND THE LIMITED PARTNERSHIP AGREEMENT OF THE PARTNERSHIP. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR A SUBSTANTIAL PERIOD OF TIME. AN INVESTOR (AND EACH EMPLOYEE, REPRESENTATIVE OR OTHER AGENT OF THE INVESTOR) MAY DISCLOSE, WITHOUT LIMITATION OF ANY KIND, THE TAX TREATMENT AND TAX STRUCTURE OF AN INVESTMENT IN THE PARTNERSHIP. NEITHER THE INVESTMENT MANAGER NOR THE GENERAL PARTNER PLANS TO REGISTER AS A COMMODITY POOL OPERATOR ("CPO") UNDER THE COMMODITY EXCHANGE ACT ("CEA") AND THE RULES OF THE COMMODITY FUTURES TRADING COMMISSION ("CFTC") PROMULGATED THEREUNDER BY iii EWAGNE1217652.1 - 11!29/12 EFTA01197167 VIRTUE OF THE DE MINIMIS TRADING EXEMPTION PROVIDED UNDER CFTC RULE 4. I 3(a)(3). THE INVESTMENT MANAGER AND THE GENERAL PARTNER QUALIFY FOR THE EXEMPTION UNDER CFTC RULE 4.I3(a)(3) WITH RESPECT TO THE PARTNERSHIP ON THE BASIS THAT, AMONG OTHER THINGS (I) EACH LIMITED PARTNER IS AN "ACCREDITED INVESTOR" AS DEFINED UNDER SEC RULES, OR TRUSTS FORMED BY ACCREDITED INVESTORS FOR THE BENEFIT OF THEIR FAMILY MEMBERS; (II) INTERESTS IN THE PARTNERSHIP ARE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT AND ARE OFFERED AND SOLD WITHOUT MARKETING TO THE PUBLIC IN THE UNITED STATES, AND (III) AT ALL TIMES EITHER (A) THE AGGREGATE INITIAL MARGIN AND PREMIUMS REQUIRED TO ESTABLISH COMMODITY INTEREST POSITIONS WILL NOT EXCEED 5% OF THE LIQUIDATION VALUE OF THE PARTNERSHIP'S PORTFOLIO; OR (B) THE AGGREGATE NET NOTIONAL VALUE OF COMMODITY INTEREST POSITIONS WILL NOT EXCEED 100% OF THE LIQUIDATION VALUE OF THE PARTNERSHIP'S PORTFOLIO. AS A RESULT, UNLIKE A REGISTERED CPO, THE INVESTMENT MANAGER AND THE GENERAL PARTNER ARE NOT SUBJECT TO MANY OF THE REQUIREMENTS OF THE CEA AND THE RULES OF THE CFTC PROMULGATED THEREUNDER, INCLUDING THE REQUIREMENT TO DELIVER A DISCLOSURE DOCUMENT CONTAINING INFORMATION REQUIRED BY CFTC RULES AND THE REQUIREMENT TO DELIVER A CERTIFIED ANNUAL REPORT TO LIMITED PARTNERS. THE PARTNERSHIP MAY TRADE FOREIGN FUTURES OR OPTIONS CONTRACTS. TRANSACTIONS ON MARKETS LOCATED OUTSIDE THE UNITED STATES, INCLUDING MARKETS FORMALLY LINKED TO A UNITED STATES MARKET, MAY BE SUBJECT TO REGULATIONS WHICH OFFER DIFI-ERENT OR DIMINISHED PROTECTION TO THE PARTNERSHIP AND ITS LIMITED PARTNERS. FURTHER, UNITED STATES REGULATORY AUTHORITIES MAY BE UNABLE TO COMPEL THE ENFORCEMENT OF THE RULES OF REGULATORY AUTHORITIES OR MARKETS IN NON-UNITED STATES JURISDICTIONS WHERE TRANSACTIONS FOR THE PARTNERSHIP MAY BE EFFECTED. PROSPECTIVE INVESTORS SHOULD INFORM THEMSELVES AS TO THE LEGAL REQUIREMENTS AND TAX CONSEQUENCES WITHIN THE COUNTRIES OF THEIR CITIZENSHIP, RESIDENCE AND DOMICILE FOR THE ACQUISITION, HOLDING OR DISPOSAL OF THE INTERESTS OFFERED HEREBY AND ANY FOREIGN EXCHANGE OR OTHER RESTRICTIONS THAT MAY BE RELEVANT TO THEM. FOR FLORIDA RESIDENTS ONLY: THE SALE OF THESE LIMITED PARTNERSHIP INTERESTS SHALL BE VOIDABLE BY THE PURCHASER WITHIN 3 DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE ISSUER OR WITHIN 3 DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER AS REQUIRED BY SECTION 517.061(11)(a)(5), FLORIDA STATUTES. iv EWAGNE1217652.1 - 11!29/12 EFTA01197168 FOR NEW HAMPSHIRE RESIDENTS ONLY: NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY, OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER, OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH. v EWAGNE1217652.1 - 11!29/12 EFTA01197169  Table of Contents PAGE SUMMARY OF TERMS 1 USE OF PROCEEDS 9 INVESTMENT PROGRAM 9 GENERAL PARTNER; INVESTMENT MANAGER 15 INVESTOR SUITABILITY 16 FISCAL YEAR 17 ALLOCATION OF GAINS AND LOSSES; NEW ISSUES 18 MANAGEMENT FEE; FEES AND EXPENSES 20 ADMINISTRATOR 21 CERTAIN RISK FACTORS 22 OTHER ACTIVITIES OF THE GENERAL PARTNER, INVESTMENT MANAGER; CONFLICTS OF INTEREST 32 BROKERAGE COMMISSIONS; TURNOVER 34 PARTNERSHIP POLICIES; COMPARISON TO REGISTERED INVESTMENT COMPANIES 35 OUTLINE OF LIMITED PARTNERSHIP AGREEMENT 37 INCOME TAX ASPECTS 43 ADDITIONAL INFORMATION 51 SUBSCRIPTION FOR AN INTEREST 51 vi EWAGNE1217652.1 - 11!29/12 EFTA01197170  SUMMARY OF TERMS The following summary is qualified in its entirety by the more detailed information set forth elsewhere in this Confidential Private Offering Memorandum (this "Memorandum") and the Limited Partnership Agreement (the "Limited Partnership Agreement") of Boothbay Multi-Strategy Fund, LP (the "Partnership"), which should be reviewed carefully by each prospective investor before investing. PARTNERSHIP: The Partnership was organized as a Delaware limited partnership in December 2012. INVESTMENT The Partnership's investment objective is to achieve above-average PROGRAM: capital appreciation by opportunistically trading and investing in a wide variety of securities, instruments, and other investment opportunities and engaging in a broad array of trading and investment strategies. The Investment Manager may also invest the Partnership's capital directly in one or more public or private investments as it identifies attractive special situation investment opportunities. (See "Investment Program.") There can be no assurance that the Partnership will achieve its objective or that it will not incur losses. GENERAL Boothbay Hybrid GP, LLC, a Delaware limited liability company, is the PARTNER; General Partner of the Partnership (the "General Partner"). Boothbay INVESTMENT Fund Management, LLC, a Delaware limited liability company, is the MANAGER: Investment Manager of the Partnership (the "Investment Manager"). The principal of both the General Partner and the Investment Manager is An Glass. (See "General Partner; Investment Manager" and "Other Activities of the General Partner, Investment Manager; Conflicts of Interest.") The Investment Manager is primarily responsible for making all portfolio management and investment decisions on behalf of the Partnership and for selecting Portfolio Managers for the Partnership, while the General Partner will manage the day-to-day affairs of the Partnership and perform certain administrative functions for the Partnership. The principal office of the General Partner and the Investment Manager is located at 810 r h Avenue, 4ih Floor, New York, New York 10019. TERM: Perpetual, unless terminated in accordance with the Limited Partnership Agreement. The General Partner, in its discretion, may elect to terminate the Partnership at any time for any reason. LIMITED Limited partnership interests in the Partnership ("Interests") will be PARTNERS: offered primarily to U.S. taxable investors who qualify as "accredited investors" (within the meaning of Rule 501(a) of the Securities Act of 1933, as amended) and "qualified purchasers" (within the meaning of Section 2(a)(51) of the Investment Company Act of 1940, as amended (the "1940 Act"). The General Partner, in its discretion, may also admit certain non-U.S. investors and U.S. tax-exempt investors as Limited 1 EWAGNE1217652.1 - 11!29/12 EFTA01197171  Partners who in all cases qualify as "accredited investors" and "qualified purchasers." The General Partner may, in its discretion, decline to admit any investor for any reason. An investor admitted to the Partnership shall become a "Limited Partner" (and together with the General Partner, a "Partner"). The Partnership may establish other classes and/or series of Interests with rights, terms and provisions which differ from those set forth herein. INITIAL CAPITAL $1,000,000 minimum initial capital contribution, subject to the discretion CONTRIBUTIONS: of the General Partner to accept lesser amounts. ADDITIONAL The General Partner may, in its discretion, permit a Limited Partner to CAPITAL make an additional capital contribution to the Partnership as of the first CONTRIBUTIONS; day of any calendar month in an amount of at least $100,000, subject to ADMISSIONS: the discretion of the General Partner to accept lesser amounts or to accept contributions at other times; and new Partners, including general partners, may be admitted to the Partnership at such times at the discretion of the General Partner. CAPITAL Upon each Partner's admission to the Partnership, a capital account ACCOUNTS: ("Capital Account") will be established on the books of the Partnership for such Partner in the amount of such Partner's initial capital contribution. A separate Capital Account will be established for each capital contribution made by a Partner to the Partnership for purposes of calculating the Incentive Allocation (as defined below). The term "Capital Account" as used throughout this Memorandum shall be deemed to refer to all of a particular Partner's capital accounts in the aggregate. (See "Outline of Limited Partnership Agreement.") ALLOCATION OF At the close of each accounting period of the Partnership, any net capital GAINS AND appreciation or depreciation (determined after all Partnership expenses LOSSES: and including current income and realized and unrealized appreciation and depreciation) for the accounting period then ended will be tentatively allocated to all Partners (including the General Partner) in proportion to their respective Capital Accounts at the beginning of such accounting period, subject to reallocation as described below. INCENTIVE At the end of each fiscal year of the Partnership or upon a Limited ALLOCATION AND Partner's withdrawal of all or any portion of his Capital Account, fifteen LOSS RECOVERY percent (15%) of the aggregate net capital appreciation (determined after ACCOUNT: all Partnership expenses are taken into account) temporarily allocated to the Capital Account of each Limited Partner (or the withdrawing Limited Partner with respect to the portion withdrawn) for such fiscal year (or elapsed portion thereof) will be reallocated to the Capital Account of the General Partner (the "Incentive Allocation"). The General Partner shall have the right to fully or partially waive receipt of any Incentive Allocation with respect to one or more Limited Partners 2 EWAGNE1217652.1 - 11/29/12 EFTA01197172  without notice to, or the consent of, the other Limited Partners. The Partnership will maintain a memorandum loss recovery account for each Capital Account of each Limited Partner (a "Loss Recovery Account") so that in general, for purposes of calculating the Incentive Allocation, previously unrecouped losses in prior years will be deducted from any gains in succeeding years. The Loss Recovery Account corresponding to a Capital Account will be charged with any net capital depreciation allocated to such Capital Account. The General Partner will be allocated, as indicated above, an Incentive Allocation with respect to a Capital Account only after such Capital Account has recovered any allocation of net capital depreciation. Amounts in a Loss Recovery Account will be proportionately reduced for withdrawals of capital from the corresponding Capital Account. MANAGEMENT The Investment Manager will charge the Partnership an annual FEE; EXPENSES: management fee (the "Management Fee") of one percent (1.0%) of the net asset value of each Limited Partner's Capital Account, 0.25% payable quarterly in advance. Capital contributions made as of times other than the first day of a calendar quarter will be assessed a pro rata Management Fee at the time of contribution. Once paid, the Management Fee is non-refundable. The Investment Manager will have the right to fully or partially waive receipt of any Management Fees with respect to one or more Limited Partners without notice to, or the consent of, the other Limited Partners. (See "Allocation of Gains and Losses; New Issues" and "Management Fee; Fees and Expenses.") In addition to the Management Fee, the Partnership will bear its own expenses, including expenses directly or indirectly related to the Partnership's operations and investment transactions and positions for the Partnership's account, interest expense, brokerage commissions, custodial fees, costs of borrowing securities to be sold short, research and due diligence fees and expenses (including any travel to perform research or initial and ongoing due diligence on Portfolio Managers, online news and quotation services, computer hardware and software used for research, Bloomberg service, etc.), seat license fees, withholding and transfer taxes, blue sky fees and other initial and ongoing offering costs and expenses, initial and ongoing legal, audit, administration and accounting fees and expenses, investor reporting costs, risk management costs (including risk management systems and technology), data storage and connectivity charges, insurance expenses, consulting fees and expenses, professional fees and expenses, and other similar fees and expenses. To the extent any Partnership expenses are advanced by the General Partner or the Investment Manager on behalf of the Partnership, such expenses will be promptly reimbursed. The General Partner and the Investment Manager will generally be responsible for their own overhead expenses including rent and utilities and the compensation of their employees; provided, that the Partnership 3 EWAGNE1217652.1 - 11!29/12 EFTA01197173  will be responsible for expenses incurred in connection with risk management and due diligence of existing and prospective investments and Portfolio Managers by the Investment Manager's employees, including, without limitation, all or a portion of the compensation of the employees of the Investment Manager who perform such risk management and due diligence for the benefit of the Partnership (collectively, "Diligence Expenses"). The Investment Manager will determine, in its sole discretion, the level of Diligence Expenses. The Partnership will also bear its pro rata share of the performance fees and other fees paid to Portfolio Managers and other persons who render services to the Partnership or the Investment Manager. A substantial portion of the compensation to Portfolio Managers will be in the form of fees and/or allocations based on the performance of their respective portfolios. WITHDRAWALS; Subject to the conditions described herein, a Limited Partner may make a GATE; IMPAIRED withdrawal of capital from his Capital Account as of the last day of any WITHDRAWALS: calendar quarter (a "Withdrawal Date"); provided that if a Limited Partner withdraws any capital from a Capital Account prior to the day immediately preceding the one-year anniversary of the contribution of such capital to the Partnership, such withdrawal will be subject to an early withdrawal charge for the benefit of the Partnership equal to 4% of the net asset value of the capital being withdrawn (the "Early Withdrawal Charge"). Withdrawals will be deemed made on a first- in, first-out basis for this purpose. Investor Gate Notwithstanding the foregoing, a Limited Partner may withdraw only up to 50% of the value of his Capital Account as of any Withdrawal Date (such limitation, the "Investor Gate" and the amount permitted to be withdrawn pursuant to the Investor Gate, the "Maximum Amount"), unless such Investor Gate is waived by the General Partner, in its discretion. If a Limited Partner submits a request to withdraw more than the Maximum Amount as of a single Withdrawal Date (such date, the "Gated Withdrawal Date"), capital will be withdrawn from the Partnership without any further action required of such Limited Partner (including any gains or losses thereon) as follows: (a) First, as of the Gated Withdrawal Date, the Limited Partner will be deemed to have withdrawn capital from his Capital Account equal to the Maximum Amount; and (b) Second, as of the Withdrawal Date immediately following the Gated Withdrawal Date, the Limited Partner will be deemed to have withdrawn capital from his Capital Account equal to the amount requested to be withdrawn on the Gated Withdrawal Date but not satisfied as a result 4 EWAGNE1217652.1 - 11!29/12 EFTA01197174  of the Investor Gate. Capital not withdrawn as a result of the Investor Gate will remain invested in the Partnership and will increase or decrease based upon the performance of the Partnership until the effective date of the withdrawal of such capital. Impaired Withdrawals If the General Partner determines that the liquidity in the Partnership's investment portfolio is impaired as of a Withdrawal Date (an "Impaired Withdrawal Date"), the General Partner may require each Limited Partner making a withdrawal of ninety percent (90%) or more of his Capital Accounts as of such date (a "Designated Limited Partner") to retain his pro rata interest in any investments that the Investment Manager believes cannot be liquidated at such time without undue cost to the non-withdrawing Limited Partners ("Designated Investments"). Designated Limited Partners will retain such interests until the Investment Manager liquidates the applicable Designated Investments in the ordinary course of business (an "Impaired Withdrawal Period"), or such earlier date as of which the General Partner, in its discretion, elects to terminate the Impaired Withdrawal Period. A Limited Partner will be not required to maintain an interest in Designated Investments that have a value as of such Impaired Withdrawal Date of more than ten percent (10%) of the total net asset value of such Limited Partner's Capital Accounts as of such date. The Incentive Allocation, if any, due to the General Partner with respect to a Designated Limited Partner on an Impaired Withdrawal Date (but not on any other date or with respect to any other Limited Partner) shall be calculated as if the Designated Investments were deemed to have no value as of such date. During an Impaired Withdrawal Period, a Designated Limited Partner's interest in any Designated Investments will increase or decrease based upon the performance of such Designated Investments. A Designated Limited Partner will receive distributions from the Partnership promptly following the liquidation of each applicable Designated Investment, net of any expenses. Management Fees will accrue on the Designated Investments during an Impaired Withdrawal Period, but will not be payable with respect to a Designated Limited Partner until he has received distributions from Designated Investments that exceed any applicable unrecovered Loss Recovery Account balance that existed as of the Illiquid Redemption Date. An Incentive Allocation shall also be due with respect to all such distributions to the extent they exceed any applicable unrecovered Loss Recovery Account balance that existed as of the Illiquid Redemption Date. The General Partner and the Investment Manager shall not withdraw any 5 EWAGNE1217652.1 - 11!29/12 EFTA01197175  capital from the Partnership during an Impaired Withdrawal Period other than amounts necessary to pay taxes and employee and consultant compensation amounts. Withdrawal Notice A Limited Partner must provide irrevocable written notice to the General Partner and the Administrator of his desire to make a withdrawal as of a Withdrawal Date at least forty-five (45) days prior to such Withdrawal Date. Such notice period may be waived in whole or in part by the General Partner in its sole discretion with respect to one or more Limited Partners. After receiving a withdrawal notice from a Limited Partner, the Partnership may, upon at least 24 hours' notice to the Limited Partner (via email or otherwise), effect such withdrawal and pay all or a portion of the withdrawal proceeds at any time prior to the anticipated Withdrawal Date. In addition, the General Partner, in its sole discretion, may permit a Limited Partner to make a withdrawal from his Capital Account on a date that is not a Withdrawal Date without notice to, or the consent of, the other Limited Partners. Subject to the Investor Gate and the Impaired Withdrawal Date procedures described above, a Limited Partner withdrawing amounts from a Capital Account will generally be paid the amount withdrawn, net of any Incentive Allocation, Early Withdrawal Charges and accrued expenses through the Withdrawal Date, within thirty (30) days after the applicable Withdrawal Date, provided, that a Limited Partner withdrawing ninety percent (90%) or more of his Capital Accounts will be subject to a holdback of up to ten percent (10%) of the amount requested to be withdrawn as of such Withdrawal Date (regardless of whether such requested withdrawal amount is reduced due to the application of the Investor Gate), to be settled without interest no later than thirty (30) days after completion of the audit of the Partnership's books for the year in which such withdrawal took place. The right of any Limited Partner to receive amounts withdrawn is subject to a holdback for the provision by the General Partner for all Partnership liabilities and reserves for contingencies whether or not required by U.S. generally accepted accounting principles ("GAAP"). (See "Outline of Limited Partnership Agreement.") The General Partner, in its sole discretion, may distribute securities or other property of the Partnership selected by the General Partner in its discretion, in lieu of, or in addition to, cash in satisfaction of withdrawal requests. (See "Outline of Limited Partnership Agreement" and "Certain Risk Factors—In-Kind Distributions.") 6 EWAGNE1217652.1 - I I/29/12 EFTA01197176 REQUIRED The General Partner will have the right to require any Limited Partner to WITHDRAWALS: fully or partially withdraw from the Partnership at any time and for any reason or no reason upon at least two (2) days' prior written notice (which may be given to a Limited Partner by e-mail or otherwise). A Limited Partner withdrawing from the Partnership in such event will be paid (in cash and/or in the General Partner's sole discretion, in kind) an amount equal to at least ninety percent (90%) of the amount that he is being required to withdraw, net of any Incentive Allocation and any accrued expenses through the withdrawal date, within thirty (30) days after the withdrawal date, with the balance settled without interest within thirty (30) days after completion of the audit of the Partnership's books for the year in which such required withdrawal took place. A Limited Partner who is required to withdraw all or any capital from his Capital Account will not be subject to any otherwise applicable Early Withdrawal Charges with respect to such withdrawal. The right of any Limited Partner to receive amounts with respect to a required withdrawal is subject to a holdback for the provision by the General Partner for all Partnership liabilities and reserves for contingencies (whether or not required by GAAP). (See "Outline of Limited Partnership Agreement - Required Withdrawals.") FISCAL YEAR: The Partnership's fiscal year ends on each December 31'. RISK FACTORS: The investment program of the Partnership involves significant risks. (See "Certain Risk Factors.") CONFLICTS OF The General Partner, the Investment Manager and/or their respective INTEREST: principal may manage and render services to other private investment entities and accounts, some of which have investment programs that are substantially similar or identical to the Partnership's investment program. As a result, the General Partner, the Investment Manager, as well as their managers, members and employees, may allocate their time, as well as trading and investment opportunities, between the Partnership and such other entities or accounts. The General Partner, the Investment Manager and their managers, members and employees are required to devote only such amount of time to the Partnership as they, in their discretion, deem necessary, and may also devote a substantial portion of their time and attention to other entities, accounts, investments and activities. When the Investment Manager determines that a particular investment opportunity would be desirable for the Partnership and one or more of the other entities or accounts managed by the Investment Manager or its affiliates, it will seek to allocate such opportunity among the Partnership and such other entities or accounts in a manner that it deems fair and equitable under the circumstances existing at such time. (See "Other Activities of the General Partner, Investment Manager; Conflicts of Interest.") 7 EWAGNE1217652.1 - II/29/12 EFTA01197177 INVESTMENT The Partnership is not and will not be registered as an investment POLICIES: company and therefore is not required to adhere to certain investment policies under the Investment Company Act of 1940, as amended. (See "Partnership Policies; Comparison to Registered Investment Companies.") BROKERAGE Portfolio transactions for the Partnership's investments are allocated by COMMISSIONS: the Investment Manager to brokers on the basis of "best execution" and in consideration of such broker's provision or payment of the cost of research and other services which are of benefit to the Partnership and/or other funds or accounts managed by the General Partner, the Investment Manager and their respective affiliates. (See "Brokerage Commissions; Turnover.") LIMITED PARTNER Limited Partners receive from the Partnership: (i) periodic unaudited REPORTS: reports, no less frequently than monthly, regarding the Partnership's performance; (ii) annual audited financial statements of the Partnership; and (iii) annual tax information for the preparation of their respective U.S. federal income tax returns. (See "Outline of Limited Partnership Agreement.") SUBSCRIPTION Persons interested in subscribing for an Interest will be furnished, and be FOR AN INTEREST: required to complete and return to the General Partner, a Subscription Agreement and certain other documents. (See "Subscription for an Interest.") PRIME BROKER: UBS Securities LLC AUDITOR: Rothstein Kass & Company, ADMINISTRATOR: O us Fund Services LEGAL COUNSEL: Kleinber Ka lan Wolff & Cohen, ■., ryes as legal counsel to the Partnership, the General Partner and the Investment Manager, and does not represent the Limited Partners. 8 EWAGNE1217652.1 - I I/29/12 EFTA01197178  USE OF PROCEEDS Substantially all of the proceeds from the sale of the limited partnership interests (the "Interests") will be available for the investment program of Boothbay Multi-Strategy Fund, LP (the "Partnership"); provided that the Partnership will reimburse Boothbay Hybrid GP, LLC (the "General Partner") and/or Boothbay Fund Management, LLC (the "Investment Manager") for the Partnership's organizational expenses (including the cost of preparing this Confidential Private Offering Memorandum (this "Memorandum") and the Partnership's Limited Partnership Agreement (the "Limited Partnership Agreement") and Subscription Agreement (the "Subscription Agreement") and offering expenses. The Partnership may at any time establish other classes and/or series of Interests with rights, terms, and provisions which differ from those set forth herein. Such classes and/or series may have, among other things, different Management Fees, Performance Allocations (each as defined below) and/or withdrawal terms than as described herein. INVESTMENT PROGRAM The Partnership's investment objective is to achieve above-average capital appreciation by opportunistically trading and investing in a wide variety of securities, instruments, and other investment opportunities and engaging in a broad array of trading and investment strategies. The Investment Manager may also invest the Partnership's capital directly in one or more public or private investments as it identifies attractive special situation investment opportunities. The Partnership's capital is allocated among a number of third-party managers through collective investment vehicles and managed accounts (collectively referred to throughout this Memorandum as "Portfolio Managers") and investments are made using the capital of the Partnership itself. For the most part, rather than malting primary investment and trading decisions itself, the Investment Manager grants trading authority over portions of the capital of the Partnership to Portfolio Managers, and monitors and evaluates their performance, and reallocates capital as it deems appropriate. The Investment Manager does not establish fixed guidelines regarding diversification of investments to be followed by the Partnership; the Partnership is authorized to invest in all types of securities and other financial instruments of United States and non-U.S. issuers, and to sell securities short. Investment Strategies The Partnership invests opportunistically and the universe of eligible investments is not materially limited by any firm policies; however, the investment strategies that the Partnership employs may be expected to include, among others, some or all of the following strategies. The Partnership may concentrate in a select few strategies while not employing others and may employ additional investment strategies or suspend any such strategies, as determined by the Investment Manager in its discretion, at any time without notice. • Relative Value and Fundamental Equity Strategies: Portfolio Managers employing a relative value strategy perform detailed fundamental research on companies, usually within a particular industry group (e.g., financial services) or subgroup (e.g., securities brokers). These Portfolio Managers make use of research, company visits, industry conferences, and their 9 EWAGNE1217652.1 - 11!29/12 EFTA01197179 own expert knowledge in making investment decisions. Fundamental change at these companies drives changes in investor perception, which impacts the valuation of their securities. The Portfolio Managers attempt to spot changes in fundamentals, identify where comparable companies are mispriced in relation to each other and buy the undervalued companies and short sell the overvalued ones, hoping to capture the excess return as a perceived mispricing narrows, while minimizing overall net market risk. A Portfolio Manager may also hedge its investment with a contra-investment in a correlated index or sector rather than a comparable company. • Statistical Arbitrage and Quantitative Strategies: U.S. and non-U.S. statistical arbitrage and quantitative strategies generally are quantitatively driven and are employed across the global equity, interest rate, foreign exchange and currency markets. The strategies attempt to identify over/under-valued securities. Generally, investments are in more liquid securities and often focus on geographical regions, industry sectors or securities with similar trading characteristics. To help identify securities and outline market and non-market risks, Portfolio Managers may build proprietary models that consider historical, as well as forward-looking factors. Qualitative analysis of current business information may also be employed to determine value, potential return, and relevant risk factors. Models and tools are monitored and updated as paradigm shifts occur in the markets. The various statistical arbitrage strategies tend to have had low correlation with overall market performance. In addition, Portfolio Managers may seek to mitigate market risk through diversification, hedging and by limiting exposure to any one asset class, industry or company. Non-U.S. investments may be focused on developed areas of Asia and Europe to maintain liquidity and consistent information reporting. Statistical arbitrage strategies are dependent on technology, and the Investment Manager expects to invest significantly in and develop a state-of-the-art infrastructure to support this trading activity. This infrastructure is intended to allow the Partnership to trade electronically on a number of exchanges on a global basis. The ongoing migration of the world's trading markets to electronic exchanges continues to create opportunities for Portfolio Managers utilizing statistical trading strategies. The turnover of these strategies can be high and marked by very short holding periods and, as a result, profitability is often highly dependent on minimizing transaction costs. In recent regulatory pronouncements the Securities and Exchange Commission has indicated that it is studying the factors affecting, and affected by "High Frequency Trading" with a view to determining whether additional, or different, regulatory measures are appropriate. Some of the Portfolio Managers' statistical arbitrage strategies may be designated as "High Frequency Trading." • Fixed-Income Strategies: While the Investment Manager does not intend to initially invest the Partnership's capital in these types of strategies, it will possibly do so in the future. Portfolio Managers may employ a number of fixed-income strategies, including the following: • Fixed-Income Arbitrage: Fixed-income arbitrage is a strategy that seeks to profit from inefficient pricing of related fixed-income securities. Leverage may be employed to maximize the return from the specific strategy. The securities to which a Portfolio Manager will apply this strategy typically I0 EWAGNE1217652.1 - 11!29/12 EFTA01197180  trade at a perceived discount or premium to instruments that are otherwise similar in maturity, yield and creditworthiness. Fixed-income arbitrage trading is performed using sovereign debt, agency debt, corporate debt, asset backed securities and related