OPERATING SERVICES AGREEMENT
THIS
AGREEMENT is
made
and entered into as of this 20th day of September, 2002, as amended April 28,
2006, by and between Alternative Investment Partners, LLC, a Delaware limited
liability company (the “Adviser”) and AIP Alternative Strategies Funds, a
Delaware statutory trust (the “Trust”), regarding each series of the Trust (the
“Funds”).
WHEREAS,
the
Trust is registered as an open-end, management investment company under the
Investment Company Act of 1940, as amended (the " 1940 Act"); and
WHEREAS,
the
Board of Trustees of the Trust has approved this Agreement, and the Adviser
is
willing to furnish such services upon the terms and conditions herein set
forth.
NOW,
THEREFORE,
in
consideration of the premises and mutual covenants herein contained, it is
agreed between the parties hereto as follows:
1. Appointment
of Adviser as Primary Service Provider.
The
Trust desires to employ the Adviser in performing or arranging for the delivery
of all professional, administrative and operational services required by the
Funds to operate their business in accordance with the limitations specified
in
its Declaration of Trust dated April 12, 2002, amended July 29, 2002 (the
"Charter"), and in its Prospectus as from time to time in effect (the
"Prospectus"), and in the manner and to the extent as may from time to time
be
approved by the Board of Trustees of the Trust. The Trust desires to employ
and
hereby appoints the Adviser to act as primary service provider to the Funds.
The
Adviser accepts the appointment and agrees to furnish the services for the
compensation set forth below.
2. Delivery
of Fund Documents.
The
Trust has furnished the Adviser with copies properly certified or authenticated
of each of the following:
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(a)
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Charter.
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(b)
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By-Laws-of
the Trust, as amended from time to
time.
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(c)
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Resolutions
of the Trustees of the Trust selecting Alternative Investment Partners,
LLC as Adviser to the Funds and approving the form of this
Agreement.
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(d)
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Funds’
Prospectus.
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The
Trust
will furnish the Adviser from time to time with copies, properly certified
or
authenticated, of all amendments of or supplements to the foregoing, if
any.
3. Services
Provided by Adviser as Primary Service Provider.
Subject
to the supervision and direction of the Board of Trustees of the Trust, the
Adviser will, either directly or by employing suitable sub-contractors
(a) act in strict conformity with the Trust’s Declaration of Trust, the
Investment Company Act of 1940, as amended (the "1940 Act") and the Investment
Advisers Act of 1940, as amended, (b) provide compliance and other
administrative oversight in accordance with each Fund's investment objective
and
policies as described in the Funds’ Prospectus, (c) provide continuous
registration and maintenance of its registration under the Securities Act of
1933, as amended, the Investment Company Act of 1940, as amended, and state
securities laws and regulations, (d) preparation of and printing and
mailing reports, notices and prospectuses to current shareholders, (e)
provide custodial services to each Fund’s portfolio, daily fund account
services, transfer agency and shareholder account servicing and services in
acting as the Funds’ distributor, (f) providing required insurance for
fidelity and other coverage as deemed appropriate by the Board of Trustees
of
the Trust, and (g) advise and assist the officers of the Trust in taking
such steps as are necessary or appropriate to carry out the decisions of the
Board of Trustees of the Trust and its committees with respect to the foregoing
matters and the conduct of the business of the Funds. In addition, the Adviser
will furnish the Trust with whatever statistical information the Trust may
reasonably request with respect to ongoing operations of the Funds.
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The
Adviser will keep the Trust informed of any service related developments
materially affecting the Funds, and will, on its own initiative, furnish the
Trust from time to time with whatever information the Adviser believes is
appropriate for this purpose.
5. Allocation
of Charges and Expenses.
The
Adviser will pay all expenses incurred in performing all professional,
administrative and operational services under this Agreement. (a) costs incurred
in connection with registration and maintenance of its registration under the
Securities Act of 1933, as amended, the Investment Company Act of 1940, as
amended, and state securities laws and regulations, (b) preparation of and
printing and mailing reports, notices and prospectuses to current shareholders,
(c) transfer taxes on the sales of the Funds’ shares, (d) custodial, shareholder
transfer charges and fees of the Funds’ distributor, (e) legal, auditing, tax
return preparation and accounting expenses, (f) expenses of servicing
shareholder accounts held at the Funds, (g) insurance expenses for fidelity
and
other coverage, (h) fees and expenses of Trustees who are not “interested
persons” within the meaning of the Investment Company Act of 1940, and (i)
expenses of Trustee and shareholder meetings. The Adviser will not be required
to pay any expenses of the Funds other than those specifically allocated to
it
in this paragraph 5. In particular, but without limiting the generality of
the
foregoing, the Funds will be required to pay: brokerage and other expenses
of
executing portfolio transactions; transfer taxes on the sales of portfolio
securities: other taxes or governmental fees; dividends paid out on short sales;
interest charges and other costs of borrowing funds; litigation and
indemnification expenses and other extraordinary expenses not incurred in the
ordinary course of the Funds’ business.
6. Compensation
of the Adviser.
In
consideration of the services rendered pursuant to this Agreement, the Funds
will pay to the Adviser, as compensation for the services provided by the
Adviser and its agents under this Agreement, a monthly fee of 0.74% (on an
annualized basis) of the average net assets of the Funds.
In
the
event of any termination of this Agreement, the fee provided for in this
paragraph 6 shall be calculated on the basis of a period ending on the last
day
on which this Agreement is in effect, subject to a pro rata
adjustment
based on the number of days elapsed in the current period as a percentage of
the
total number of days in such period.
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7. Standard
of Care; Limitation of Liability.
The
Adviser will exercise its best judgment in rendering the services described
in
paragraph 4 above. The Adviser shall not be liable for any error of judgment
or
mistake of law or for any loss suffered by the Funds in connection with the
matters to which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of
its
duties or from reckless disregard by the Adviser of its obligations and duties
under this Agreement. Any person, even though an officer, director, employee,
or
agent of the Adviser, who may be or become an officer, trustee, employee or
agent of the Funds, will be deemed, when rendering services to the Funds, to
be
rendering such services to, or acting solely for, the Funds and not as an
officer, director, employee or agent, or one under the control or direction
of
the Adviser, even though paid by it.
8. Duration
and Termination of this Agreement.
This
Agreement shall remain in force for an initial term of two years and from year
to year thereafter, but only so long as such continuance is specifically
approved at least annually by the vote of a majority of the Trustees who are
not
interested persons of the Adviser or of the Funds, cast in person at a meeting
called for the purpose of voting on such approval and by a vote of the Board
of
Trustees or of a majority of the outstanding voting securities of the Funds.
The
aforesaid requirement that continuance of this Agreement be specifically
approved at least annually shall be construed in a manner consistent with the
1940 Act and the rules and regulations thereunder. This Agreement may, on sixty
(60) days, written notice, be terminated at any time without the payment of
any
penalty, by the Board of Trustees of the Trust, or by vote of a majority of
the
outstanding voting securities of the Funds, or by the Adviser. This Agreement
shall automatically terminate in the event of its assignment. In interpreting
the provisions of this Agreement, the definitions contained in Section 2(a)
of
the 1940 Act (particularly the definitions of "interested person", "assignment"
and "majority of the outstanding voting securities"), as from time to time
amended, shall be applied, subject, however, to such exemptions, as may be
granted by the Securities and Exchange Commission by any rule, regulation or
order.
9. Amendment
of this Agreement.
No
provisions of this Agreement may be amended, changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of the amendment, change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved by vote of the Board of Trustees of the Funds, including a
majority of the Trustees who are not interested persons of the Adviser or of
the
Funds, cast in person at a meeting called for the purpose of voting on such
approval.
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10. Notice.
Any
notice, advice or report to be given pursuant to this Agreement shall be
delivered or mailed:
To
the
Adviser at:
Alternative
Investment Partners, LLC
000
Xxxxxxxxxxx Xxxxxx, Xxxxx 000X
Xxxxx
Xxxxxx, XX 00000
To
the
Trust and the Funds at:
000
Xxxxxxxxxxx Xxxxxx, Xxxxx 000X
Xxxxx
Xxxxxx, XX 00000
with
a
copy to:
Blank
Rome LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
Attn:
Xxxxxx X. Xxxxxx, Esq.
11. Governing
Law.
This
Agreement constitutes the entire agreement of the parties, shall be binding
upon
and shall inure to the benefit of the parties hereto and their respective
successors and shall be governed by New York law in a manner not in conflict
with the provisions of the 1940 Act.
12. Miscellaneous.
Neither
the holders of Shares of the Funds nor the Trustees shall be personally liable
hereunder. The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof
or
otherwise affect their construction or effect. 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 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.
13. Counterparts.
This
Agreement may be executed 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.
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If
you
are in agreement with the foregoing, please sign the form of acceptance on
the
accompanying counterpart of this letter and return such counterpart to the
Funds, whereupon this letter shall become a binding contract between the Trust,
on behalf of the Funds, and the Adviser.
IN
WITNESS WHEREOF,
the
parties hereto have caused this instrument to be executed by their officers
designated below as of the day and year first above written.
By:
/s/Xxx Xxxxxxxxxx
Name:
Xxx
Xxxxxxxxxx
Title:
President
ALTERNATIVE
INVESTMENT PARTNERS, LLC
By:
/s/Xxx Xxxxxxxxxx
Name:
Xxx
Xxxxxxxxxx
Title:
Chief Executive Officer
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APPENDIX
A
Separate
Series of AIP Alternative Strategies Funds
| Ø |
Alpha
Hedged Strategies Fund
|
| Ø |
Beta
Hedged Strategies Fund
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