SERVICING AGREEMENT
THIS
AGREEMENT is made and entered into as of this ____ day of April 2010, by and
among SCS HEDGED OPPORTUNITIES
FUND, LLC, a Delaware limited liability company (the “Feeder Fund”),
SCS HEDGED OPPORTUNITIES MASTER
FUND, LLC, a Delaware limited liability company (the “Master Fund”),
SCS CAPITAL MANAGEMENT,
LLC, a Delaware limited liability company (the “Adviser”) and U.S. BANCORP FUND SERVICES,
LLC, a Wisconsin limited liability company (“USBFS”). The
Feeder Fund and the Master Fund are sometimes referred to herein individually as
a “Fund” and collectively as the “Funds”.
WHEREAS,
the Feeder Fund and the Master Fund are closed-end investment companies
registered under the Investment Company Act of 1940, as amended (the “1940
Act”);
WHEREAS,
each Fund is authorized to offer and sell units of interest in such Fund
(collectively, the “Units”);
WHEREAS,
substantially all of the Feeder Fund’s assets will be invested in the Master
Fund;
WHEREAS,
the Master Fund and the Adviser have entered into an Investment Advisory
Agreement under which the Adviser, as investment adviser to the Master Fund, has
discretionary authority for the Master Fund with respect to investment
management; and
WHEREAS,
each Fund, the Adviser and USBFS desire to enter into an agreement pursuant to
which USBFS shall provide certain administration, fund accounting, transfer
agency and recordkeeping services to the Funds.
NOW,
THEREFORE, in consideration of the mutual promises and agreements herein
contained, and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto, intending to be legally bound, do
hereby agree as follows:
1.
|
Appointment
of USBFS as Administrator
|
Each Fund
and the Adviser hereby appoint USBFS as administrator of the Funds on the terms
and conditions set forth in this Agreement, and USBFS hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement. The services and duties of USBFS shall be confined to
those matters expressly set forth herein, and no implied duties are assumed by
or may be asserted against USBFS hereunder.
2.
|
Services
and Duties of USBFS
|
USBFS
shall provide the following administration, fund accounting and transfer agency
services to the Funds:
A.
|
General
Fund Management:
|
(1)
|
Act
as liaison among Fund service
providers.
|
(2)
|
Supply:
|
a.
|
Corporate
secretarial services.
|
b.
|
Office
facilities (which may be in USBFS’, or an affiliate’s, own
offices).
|
c.
|
Non-investment-related
statistical and research data as reasonable required by the
Funds.
|
(3)
|
Coordinate
the Funds’ Boards of Directors (the “Board’s of Directors” or the
“Directors”) reasonably required communications, including, but not
limited to:
|
a.
|
Prepare
meeting agendas and resolutions, with the assistance of Fund
counsel.
|
b.
|
Prepare
reports for the Boards of Directors based on financial and administrative
data.
|
c.
|
Evaluate
independent auditor.
|
d.
|
If
requested, secure and monitor fidelity bond and director and officer
liability coverage, and make the necessary Securities and Exchange
Commission (the “SEC”) filings relating
thereto.
|
e.
|
If
requested, prepare minutes of meetings of the Boards of Directors and
holders of the Units (collectively, the
“Unitholders”).
|
f.
|
Recommend
dividend declarations to the Boards of Directors and prepare and
distribute to appropriate parties notices announcing declaration of
dividends and other distributions to
Unitholders.
|
g.
|
Attend
Boards of Directors meetings and present materials for Directors’ review
at such meetings.
|
(4)
|
Audits:
|
a.
|
Prepare
appropriate schedules and assist independent
auditors.
|
b.
|
Provide
information to the SEC and facilitate audit
process.
|
c.
|
Provide
office facilities.
|
(5)
|
Assist
in overall operations of the Funds.
|
(6)
|
Pay
Fund expenses upon written authorization from the
Funds.
|
(7)
|
Keep
each Fund’s governing documents, including its certificate of formation,
Operating Agreement (and amendments thereto) and minute books (“Governing
Documents”), but only to the extent such documents are provided to USBFS
by the Fund or its representatives for safe
keeping.
|
B.
|
Compliance:
|
(1)
|
Regulatory
Compliance:
|
a.
|
Monitor
compliance with the 1940 Act requirements,
including:
|
|
(i)
|
Total
return calculations.
|
|
(ii)
|
Maintenance
of books and records under Rule
31a-3.
|
b.
|
Monitor
each Fund's compliance with the policies and investment limitations as set
forth in its prospectus/offering memorandum (“Prospectus”) and statement
of additional information where relevant information is available
(“SAI”).
|
c.
|
Perform
its duties hereunder in compliance with all applicable laws and
regulations and provide any sub-certifications reasonably requested by the
each Fund in connection with any certification required of the Funds
pursuant to the Xxxxxxxx-Xxxxx Act of 2002 (the “SOX Act”) or any rules or
regulations promulgated by the SEC
thereunder.
|
2
d.
|
Monitor
applicable regulatory and operational service issues, and update Boards of
Directors periodically.
|
e.
|
To
the extent required under any regulation regarding anti-money laundering
that may apply to the Funds, assist the Funds in their compliance with the
Funds’ anti-money laundering procedures as they pertain to
Unitholders.
|
(2)
|
Regulation
D Compliance:
|
a.
|
Prepare
and file with the appropriate state securities authorities any and all
required compliance filings relating to the qualification of the
securities of the Funds so as to enable the Funds to make offerings of
Units in all states.
|
b.
|
Monitor
status and maintain registrations in each
state.
|
c.
|
Provide
updates regarding material developments in state securities
regulation.
|
d.
|
Prepare
and file annual amendments, as
applicable.
|
(3)
|
SEC
Registration and Reporting:
|
a.
|
Assist
Fund counsel in annual update of the Prospectus and SAI and in preparation
of proxy statements as needed.
|
b.
|
Prepare
and file annual and semiannual Unitholder reports, Form N-SAR, Form N-CSR,
and Form N-Q filings. As requested by the Fund, prepare and
file Form N-PX filings.
|
c.
|
Coordinate
the printing, filing and mailing of Prospectuses and Unitholder reports,
and amendments and supplements
thereto.
|
d.
|
File
fidelity bond under Rule 17g-1.
|
e.
|
Monitor
sales of Units and ensure that such Units are properly registered or
qualified, as applicable, with the SEC and the appropriate state
authorities.
|
f.
|
File
periodic tender offer statements under Rule
13e-4.
|
C.
|
Financial
Reporting:
|
(1)
|
Provide
financial data required by the Prospectus and
SAI.
|
(2)
|
Prepare
financial reports for officers, Unitholders, tax authorities, performance
reporting companies, the Boards of Directors, the SEC, and independent
accountants.
|
(3)
|
Compute
the yield, total return, expense ratio and portfolio turnover rate of each
class of the Funds.
|
(4)
|
Monitor
the expense accruals and notify each Fund’s management of any proposed
adjustments.
|
(5)
|
Prepare
semi-annual financial statements, which include, without limitation, the
following items:
|
a.
|
Schedule
of Investments.
|
b.
|
Statement
of Assets and Liabilities.
|
c.
|
Statement
of Operations.
|
d.
|
Statement
of Changes in Net Assets.
|
e.
|
Cash
Statement, if applicable.
|
f.
|
Notes
to Financial Statements.
|
(6)
|
Prepare
quarterly broker security transaction
summaries.
|
3
|
D.
|
Portfolio
Accounting:
|
|
(1)
|
Maintain
portfolio records on a trade date basis using security trade information
communicated from the Adviser.
|
|
(2)
|
Identify
interest and dividend accrual balances as of each valuation date and
calculate gross earnings on investments for each accounting
period.
|
|
(3)
|
Determine
gain/loss on security sales in accordance with the Governing Documents and
identify them as short-term or long-term; account for periodic
distributions of gains or losses to Unitholders and maintain undistributed
gain or loss balances as of each valuation
date.
|
|
(4)
|
Calculate
the Management Fee (as that term is defined in the Governing Documents),
and monitor for compliance with the expense limitation arrangement as set
forth in the Governing Documents.
|
|
(5)
|
For
each valuation date, calculate the expense accrual amounts in accordance
with the Governing Documents or otherwise as directed by the Funds as to
methodology, rate or dollar amount.
|
|
(6)
|
Process
and record payments for expenses upon receipt of written authorization
from the Funds.
|
|
(7)
|
For
each valuation date, determine the net asset value of the Funds according
to the accounting policies and procedures set forth in the Governing
Documents.
|
|
(8)
|
Reconcile
cash and investment balances of the Funds’
custodian.
|
|
(9)
|
Prepare
monthly reports which document the adequacy of the accounting detail to
support month-end ledger balances.
|
|
(10)
|
Prepare
and provide various statistical data relating to the Funds as requested on
an ongoing basis, including security transactions listings and portfolio
valuations.
|
|
E.
|
Unitholder
Accounting:
|
|
(1)
|
Account
for capital contributions and withdrawals on a timely basis in accordance
with the Governing Documents.
|
|
(2)
|
Calculate
per Unit net asset value, per Unit net earnings, and other per Unit
amounts reflective of the Funds’ operations at such time as required by
the nature and characteristics of the Funds (or as specified in the
Governing Documents).
|
|
(3)
|
Communicate,
at an agreed upon time, the per Unit price for each valuation
date.
|
|
(4)
|
Prepare
allocations of profit, loss, special and other allocations among the
Unitholders in accordance with the allocation methodology identified in
the Prospectus.
|
|
(5)
|
Monitor
and allocate “new issue” income among the Unitholders in accordance with
applicable Financial Industry Regulatory Authority, Inc.,
rules.
|
|
F.
|
Tax
Reporting:
|
|
(1)
|
Prepare
and file on a timely basis appropriate federal and state tax returns
including, without limitation, Form 1065 with any necessary schedules
including Schedule K-1.
|
4
|
(2)
|
Calculate
the adjusted tax basis of securities held by the Funds in accordance with
Section 754 of the Code.
|
|
(3)
|
Prepare
state income breakdowns where relevant when
due.
|
|
(4)
|
File
Form 1099 Miscellaneous for payments to service providers when
due.
|
|
(5)
|
Monitor
tax items requiring special treatment, including wash sale losses in
accordance with Section 1091 of the Code, straddles (Code Section 1092),
1256 contracts, constructive sales (Code Section 1259), short sales (Code
Section 1233), foreign currency gain and loss (Code Section 988), foreign
taxes paid, and passive foreign investment company
interests.
|
|
(6)
|
Calculate
eligible dividend income for corporate Unitholders and qualified dividend
income on an annual basis for Unitholders who are
individuals.
|
|
(7)
|
If
relevant, monitor the amount of unrelated business taxable income earned
by the Funds.
|
|
(8)
|
Perform
tax withholding, deposits and reporting with respect to non-U.S.
Unitholders, if any.
|
|
G.
|
Unitholder
Reporting:
|
|
(1)
|
Receive
orders for the purchase of Units.
|
|
(2)
|
Review
and process subscription agreements received from prospective
Unitholders.
|
|
(3)
|
Process
purchase orders with prompt delivery, where appropriate, of payment and
supporting documentation to the Funds’ custodian, and issue the
appropriate number of uncertificated Units with such uncertificated Units
being held in the appropriate Unitholder
account.
|
|
(4)
|
Arrange
for issuance of Units obtained through transfers of funds from
Unitholders’ accounts at financial
institutions.
|
|
(5)
|
Process
tender offers and related repurchase requests received in good order and,
where relevant, deliver appropriate documentation to the
Adviser.
|
|
(6)
|
Pay
monies upon receipt from the Funds where relevant, in accordance with the
instructions of redeeming
Unitholders.
|
|
(7)
|
Process
transfers of Units in accordance with the Unitholder’s instructions and as
permitted by the Governing
Documents.
|
|
(8)
|
Prepare
and transmit payments for distributions declared by the Funds, after
deducting any amount required to be withheld by any applicable laws, rules
and regulations and in accordance with Unitholder
instructions.
|
|
(9)
|
Make
changes to Unitholder records, including, but not limited to, address
changes.
|
|
(10)
|
Provide
Unitholder account information upon request and prepare and mail
confirmations and statements of account to Unitholders for all purchases,
redemptions, and other confirmable transactions as agreed upon with the
Funds.
|
|
(11)
|
Mail
account statements and performance reports in a form approved by the
Adviser to Unitholders on a quarterly
basis.
|
5
|
(12)
|
Mail
financial statements to Unitholders quarterly (unaudited) and annually
(audited).
|
|
(13)
|
Mail
those federal, state and local income tax returns and schedules as will
enable the Unitholders to prepare their respective federal, state and
local income tax returns required with respect to Unitholder
activity.
|
3.
|
Pricing
of Securities
|
For each
valuation date, USBFS shall obtain prices from a pricing source approved by the
Adviser and apply those prices to the portfolio positions of the Funds,
consistent with the provisions of the Governing Documents. For those
securities where market quotations are not readily available, the Adviser shall
approve, in good faith, procedures for determining the fair value for such
securities.
If the
Adviser desires to provide a price that varies from the price provided by the
pricing source, the Adviser shall promptly notify and supply USBFS with the
price of any such security on each valuation date. All pricing
changes made by the Funds will be in writing and must specifically identify the
securities to be changed by CUSIP, name of security, new price or rate to be
applied, and, if applicable, the time period for which the new price(s) is/are
effective.
Notwithstanding
anything to the contrary in Section 8 below, as more fully provided in this
paragraph, USBFS shall reimburse the Funds and its Unitholders for losses due to
NAV Differences (as defined below) arising out of, or relating to, USBFS’
refusal or failure to comply with the terms of this Agreement or from its bad
faith, negligence or willful misconduct in the performance of its duties under
this Agreement. Specifically, USBFS shall reimburse for any net
losses during each NAV Error Period (as defined below) resulting from an NAV
Difference that is at least $0.01 per Unit and that, as a percentage of
Recalculated NAV (as defined below) of the Funds, is at least ½ of 1%; provided,
however, that USBFS shall not be responsible for reimbursing any Unitholder
experiencing a loss during any such NAV Error Period of less than
$25. In providing reimbursement to the applicable Fund and any
Unitholder, USBFS shall, at its option, either make direct payment limited to
the amount of the NAV Differences for the Funds and any Unitholder, or will
reprocess the Unitholder transactions affected by the NAV
Differences. NAV Differences and any liability of USBFS therefrom are
to be calculated each time the net asset value per Unit is
calculated. For purposes of calculating USBFS’ liability hereunder,
gains shall offset losses within each NAV Error Period and future losses;
however, net gains shall not be carried back to offset losses in a prior NAV
Error Period. For purposes of this paragraph:
(i)
|
“NAV
Error Period” means any month during which any NAV Difference
exists.
|
(ii)
|
“NAV
Difference” means the difference between the Recalculated NAV and the net
asset value per Unit at which a given purchase or redemption is effected,
divided by the Recalculated NAV with respect to such purchase or
redemption.
|
(iii)
|
“Recalculated
NAV” means the net asset value per Unit at which a Unitholder purchase or
redemption should have been
affected.
|
4.
|
Changes
in Accounting Procedures
|
Any
changes to the Governing Documents that affect accounting practices and
procedures under this Agreement shall be effective upon written receipt of
notice and acceptance by USBFS.
6
5.
|
Changes
in Equipment, Systems, Etc.
|
USBFS
reserves the right to make changes from time to time, as it deems advisable,
relating to its systems, programs, rules, operating schedules and equipment, so
long as such changes do not adversely affect the services provided to the Funds
under this Agreement.
6.
|
Compensation
|
USBFS
shall be compensated for providing the services set forth in this Agreement in
accordance with the fee schedule set forth on Exhibit A hereto
(as amended from time to time). USBFS shall also be compensated for
such out-of-pocket expenses (e.g., telecommunication charges, postage and
delivery charges, and reproduction charges) as are reasonably incurred by USBFS
in performing its duties hereunder. The Funds shall pay all such fees
and reimbursable expenses within 30 calendar days following the receipt of the
billing notice, except for any fee or expense subject to a good faith
dispute. The Funds shall use reasonable efforts to notify USBFS in
writing within 30 calendar days following receipt of each invoice if the Funds
are disputing any amounts in good faith. The Funds shall pay such disputed
amounts within 10 calendar days of the day on which the parties agree to the
amount to be paid. With the exception of any fee or expense the Funds
are disputing in good faith as set forth above, unpaid invoices shall accrue a
finance charge of 1½% per month after the due date.
7.
|
Representations
and Warranties
|
A.
|
Each
Fund hereby represents and warrants to USBFS, which representations and
warranties shall be deemed to be continuing throughout the term of this
Agreement, that:
|
|
(1)
|
It
is duly organized and existing under the laws of the jurisdiction of its
organization, with full power to carry on its business as now conducted,
to enter into this Agreement and to perform its obligations
hereunder;
|
|
(2)
|
This
Agreement has been duly authorized, executed and delivered by the Fund in
accordance with all requisite action and constitutes a valid and legally
binding obligation of the Fund, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting the rights and remedies of creditors
and secured parties; and
|
|
(3)
|
It
is conducting its business in compliance in all material respects with all
applicable laws and regulations, both state and federal, and has obtained
all regulatory approvals necessary to carry on its business as now
conducted; there is no statute, rule, regulation, order or judgment
binding on it and no provision of its charter, bylaws or any contract
binding it or affecting its property which would prohibit its execution or
performance of this Agreement.
|
B.
|
USBFS
hereby represents and warrants to the Funds and the Adviser, which
representations and warranties shall be deemed to be continuing throughout
the term of this Agreement, that:
|
|
(1)
|
It
is duly organized and existing under the laws of the jurisdiction of its
organization, with full power to carry on its business as now conducted,
to enter into this Agreement and to perform its obligations
hereunder;
|
7
|
(2)
|
This
Agreement has been duly authorized, executed and delivered by the USBFS in
accordance with all requisite action and constitutes a valid and legally
binding obligation of USBFS, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting the rights and remedies of creditors
and secured parties; and
|
|
(3)
|
It
is conducting its business in compliance in all material respects with all
applicable laws and regulations, both state and federal, and has obtained
all regulatory approvals necessary to carry on its business as now
conducted; there is no statute, rule, regulation, order or judgment
binding on it and no provision of its charter, bylaws or any contract
binding it or affecting its property which would prohibit its execution or
performance of this Agreement.
|
8.
|
Standard
of Care; Indemnification; Limitation of
Liability
|
A.
|
USBFS
shall exercise reasonable care in the performance of its duties under this
Agreement. USBFS shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Funds in connection with
its duties under this Agreement, including losses resulting from
mechanical breakdowns or the failure of communication or power supplies
beyond USBFS’ control, except a loss arising out of or relating to USBFS’
refusal or failure to comply with the terms of this Agreement or from its
bad faith, negligence, or willful misconduct in the performance of its
duties under this Agreement. Notwithstanding any other provision of this
Agreement, if USBFS has exercised reasonable care in the performance of
its duties under this Agreement, each Fund (severally and not jointly) and
the Adviser shall indemnify and hold harmless USBFS from and against any
and all claims, demands, losses, expenses, and liabilities of any and
every nature (including reasonable attorneys' fees) that USBFS may sustain
or incur or that may be asserted against USBFS by any person arising out
of any action taken or omitted to be taken by it in performing the
services hereunder (i) in accordance with the foregoing standards, or (ii)
in reliance upon any written or oral instruction provided to USBFS by any
duly authorized officer of the Funds or such other person, the names of
whom to be included in a list of authorized persons approved by the Funds
and set forth on Exhibit B
hereto (as amended from time to time), except for any and all claims,
demands, losses, expenses, and liabilities arising out of or relating to
USBFS’ refusal or failure to comply with the terms of this Agreement or
from its bad faith, negligence or willful misconduct in the performance of
its duties under this Agreement. This indemnity shall be a
continuing obligation of each Fund, its successors and assigns,
notwithstanding the termination of this Agreement. As used in
this paragraph, the term “USBFS” shall include USBFS’ directors, officers
and employees.
|
USBFS
shall indemnify and hold each Fund, and the Adviser harmless from and against
any and all claims, demands, losses, expenses, and liabilities of any and every
nature (including reasonable attorneys' fees) that the Funds, or the Adviser may
sustain or incur or that may be asserted against the Funds, or the Adviser by
any person arising out of any action taken or omitted to be taken by USBFS as a
result of USBFS’ refusal or failure to comply with the terms of this Agreement,
or from its bad faith, negligence, or willful misconduct in the performance of
its duties under this Agreement. This indemnity shall be a continuing
obligation of USBFS, its successors and assigns, notwithstanding the termination
of this Agreement. As used in this paragraph, the terms “Funds” and
“Adviser” shall include their respective current and former directors, officers
and employees.
8
Neither
party to this Agreement shall be liable to the other party for consequential,
special or punitive damages under any provision of this Agreement.
In the
event of a mechanical breakdown or failure of communication or power supplies
beyond its control, USBFS shall take all reasonable steps to minimize service
interruptions for any period that such interruption continues. USBFS will make
every reasonable effort to restore any lost or damaged data and correct any
errors resulting from such a breakdown at the expense of USBFS. USBFS
agrees that it shall, at all times, have reasonable contingency plans with
appropriate parties, making reasonable provision for emergency use of electrical
data processing equipment to the extent appropriate equipment is
available. Representatives of the Funds shall be entitled to inspect
USBFS’ premises and operating capabilities at any time during regular business
hours of USBFS, upon reasonable notice to USBFS. Moreover, USBFS
shall provide the Funds, at such times as the Funds may reasonably require,
copies of reports rendered by independent accountants on the internal controls
and procedures of USBFS relating to the services provided by USBFS under this
Agreement.
Notwithstanding
the above, USBFS reserves the right to reprocess and correct administrative
errors at its own expense.
B.
|
In
order that the indemnification provisions contained in this section shall
apply, it is understood that if in any case the indemnitor may be asked to
indemnify or hold the indemnitee harmless, the indemnitor shall be fully
and promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that the indemnitee will use all
reasonable care to notify the indemnitor promptly concerning any situation
that presents or appears likely to present the probability of a claim for
indemnification; provided that the indemnitee’s failure to so notify the
indemnitor shall not relieve the indemnitor of its responsibility to
indemnify the indemnitee. The indemnitor shall have the option
to defend the indemnitee against any claim that may be the subject of this
indemnification. In the event that the indemnitor so elects, it
will so notify the indemnitee and thereupon the indemnitor shall take over
complete defense of the claim, and the indemnitee shall in such situation
initiate no further legal or other expenses for which it shall seek
indemnification under this section. The indemnitee shall in no
case confess any claim or make any compromise in any case in which the
indemnitor will be asked to indemnify the indemnitee except with the
indemnitor’s prior written consent.
|
C.
|
The
indemnity and defense provisions set forth in this Section 8 shall
indefinitely survive the termination and/or assignment of this
Agreement.
|
9.
|
Notification
of Error
|
The Funds
will notify USBFS of any balancing or control errors caused by USBFS upon the
later to occur of: (i) ten (10) business days after receipt of any
reports rendered by USBFS to the Funds; (ii) ten (10) business days after
discovery of any error or omission not covered in the balancing or control
procedure; or (iii) ten (10) business days after receiving notice from any
Unitholder regarding any such balancing or control error.
10.
|
Data
Necessary to Perform Services
|
The Funds
or their agent shall furnish to USBFS the data necessary to perform the services
described herein at such times and in such form as mutually agreed
upon.
9
11.
|
Proprietary
and Confidential Information
|
USBFS
agrees on behalf of itself and its directors, officers, and employees to treat
confidentially and as proprietary information of the Funds all records and other
information relative to the Funds and prior, present, or potential Unitholders
of the Funds (and clients of said Unitholders), and not to use such records and
information for any purpose other than the performance of its responsibilities
and duties hereunder, except (i) after prior notification to and approval in
writing by the Funds, which approval shall not be unreasonably withheld and may
not be withheld where USBFS may be exposed to civil or criminal contempt
proceedings for failure to comply, (ii) when requested to divulge such
information by duly constituted authorities, or (iii) when so requested by the
Funds. Records and other information which have become known to the
public through no wrongful act of USBFS or any of its employees, agents or
representatives, and information that was already in the possession of USBFS
prior to the receipt thereof from the Funds or its agent, shall not be subject
to this paragraph. Further, USBFS will adhere to any privacy policies
adopted by the Funds.
12.
|
Records
|
USBFS
shall keep records relating to the services to be performed hereunder, in the
form and manner, and for such period, as it may deem advisable, as is consistent
with industry practice and as is agreeable to the Funds. USBFS agrees that all
such records prepared or maintained by USBFS relating to the services to be
performed by USBFS hereunder are the property of the Funds and will be promptly
surrendered to the Funds or its designee on and in accordance with its
request. USBFS maintains appropriate security measures regarding the
treatment of the records and other information (including any personal
information) of the Funds and prior, present or potential Unitholders, that are
consistent and compliant with all applicable state and federal laws, rules and
regulations.
13.
|
Compliance
with Laws
|
In the
performance of its duties hereunder, USBFS undertakes to comply with the laws,
rules and regulations of governmental authorities having jurisdiction with
respect to the duties to be performed by USBFS hereunder. Except as
specifically set forth herein, USBFS assumes no responsibility for such
compliance by the Funds.
14.
|
Term
of Agreement; Amendment
|
|
A.
|
This
Agreement shall commence on the date hereof, and shall continue for an
initial term of three (3) years (the “Initial Term”) unless otherwise
terminated as provided below. Thereafter, unless otherwise
terminated earlier as provided below, this Agreement automatically renews
for additional one year terms (each a “Renewal Term”) unless either party
notifies the other, in writing, of its intention to terminate at least
sixty (60) days prior to the end of the Initial Term or the then current
Renewal Term.
|
|
B.
|
The
Funds, the Adviser or USBFS may terminate this Agreement at any time by
giving the other party a written notice not less than ninety (90)
days prior
to the date the termination is to be
effective.
|
|
C.
|
In
the event the Funds or the Adviser gives notice of termination pursuant to
either Section 14(A) or (B), such notice it shall be accompanied by a copy
of a resolution of the Board of Directors (or equivalent) of each Fund
certified by the Secretary of the Fund, electing to terminate this
Agreement and designating the successor service provider or service
providers. In the absence of such designation by the Funds,
each of the Funds shall be deemed to be its own service provider as of the
termination date and USBFS shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement. Fees and
out-of-pocket expenses incurred by USBFS, but unpaid by the Funds upon
such termination, shall be immediately due and payable upon and
notwithstanding such termination.
|
10
|
D.
|
Notwithstanding
the foregoing, this Agreement may be terminated by USBFS upon the breach
of the Funds or the Adviser, and by the Funds or the Adviser upon the
breach of USBFS, of any material term of this Agreement if such breach is
not cured within 15 days of notice of such breach to the breaching
party.
|
|
E.
|
This
Agreement may not be amended or modified in any manner except by written
agreement executed by USBFS, the Funds and the
Adviser.
|
15.
|
Duties
in the Event of Termination
|
In the
event that, in connection with termination, a successor to any of USBFS’ duties
or responsibilities hereunder is designated by the Funds by written notice to
USBFS, USBFS will promptly, upon such termination and at the expense of the
Funds, transfer to such successor all relevant books, records, correspondence,
and other data established or maintained by USBFS under this Agreement in a form
reasonably acceptable to the Funds (if such form differs from the form in which
USBFS has maintained the same, the Funds shall pay any expenses associated with
transferring the data to such form), and will cooperate in the transfer of such
duties and responsibilities, including provision for assistance from USBFS’
personnel in the establishment of books, records, and other data by such
successor. If no such successor is designated, then such books,
records and other data shall be returned to the Funds.
16.
|
Assignment
|
This
Agreement shall extend to and are binding upon the parties hereto and their
respective successors and assigns; provided, however, that this Agreement shall
not be assignable by either party hereto without the written consent of the
other party.
17.
|
Governing
Law
|
This
Agreement shall be construed in accordance with the laws of the State of
Delaware, without regard to conflicts of law principles.
18.
|
No
Agency Relationship
|
Nothing
herein contained shall be deemed to authorize or empower either party to act as
agent for the other party to this Agreement, or to conduct business in the name,
or for the account, of the other party to this Agreement.
11
19.
|
Services
Not Exclusive
|
Nothing
in this Agreement shall limit or restrict USBFS from providing services to other
parties that are similar or identical to some or all of the services provided
hereunder.
20.
|
Single
Agreement
|
For
convenience purposes, this Agreement is being entered into as a single agreement
by USBFS and each Fund (and any additional feeder funds that may be added by the
parties from time to time). However, this Agreement shall be
interpreted as applying solely to each Fund individually, and no Fund shall be
liable for the obligations of any other Fund.
21.
|
Invalidity
|
Any
provision of this Agreement which may be determined by competent authority to be
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. In such case,
the parties shall in good faith modify or substitute such provision consistent
with the original intent of the parties.
22.
|
Notices
|
Any
notice required or permitted to be given by either party to the other shall be
in writing and shall be deemed to have been given on the date delivered
personally or by courier service, or three days after sent by registered or
certified mail, postage prepaid, return receipt requested, or on the date sent
and confirmed received by facsimile transmission to the other party’s address
set forth below:
Notice to
USBFS shall be sent to:
U.S.
Bancorp Fund Services, LLC
Attention: Vice
President, Alternative Investment Products
000 Xxxx
Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx,
XX 00000
Fax
No.: (000) 000-0000
and
|
Notice
to the Funds and the Adviser shall be sent
to:
|
|
c/o
SCS Capital Management, LLC
|
|
Attention:
Xxx XxXxxxx, Managing Director
|
|
Xxx
Xxxxxxxx Xxxxxx
|
|
Xxxxxx,
XX 00000
|
|
Fax
No.:
|
(000)
000-0000
|
2
23.
|
Multiple
Originals
|
This
Agreement may be executed on two or more counterparts, each of which when so
executed shall be deemed to be an original, but such counterparts shall together
constitute but one and the same instrument.
[SIGNATURE
PAGE FOLLOWS]
13
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
a duly authorized officer on one or more counterparts as of the date first above
written.
U.S.
BANCORP FUND SERVICES, LLC
|
By:
|
Name:
|
Title:
|
By:
|
Name: Xxx
XxXxxxx
|
Title: Director
|
SCS
HEDGED OPPORTUNITIES MASTER FUND, LLC
|
By:
|
Name: Xxx
XxXxxxx
|
Title: Director
|
SCS
CAPITAL MANAGEMENT, LLC
|
By:
|
Name:
|
Title:
|
14
Exhibit
A
Fee
Schedule
Annual fee based on
aggregate assets of the Master Fund:
|
[
] basis points on the first $[
] million
|
|
[
] basis points on the next $[
] million
|
|
[
] basis points on the balance above $[
] million
|
|
Annual
minimum fee: $[ ]*
(includes Master Fund and up to 2 feeder
funds)
|
|
Annual
transfer agency fee – $[
]
|
Extraordinary Services –
additional as necessary:
·
|
Investor
Web Access through Intralinks:
|
o
|
Implementation
fee -- $[ ] per USBFS client
relationship, regardless of the number of
funds
|
o
|
Annual
subscription fee -- $[ ] per year
(for first 100 users)
|
·
|
Regulation
D Filings -- fees are in addition to any fees charged by the relevant
jurisdiction
|
o
|
$[
] per initial and renewal
filings
|
o
|
$[
] per initial filing if USBFS provides assistance in
completing
|
o
|
$[
] per amendment filing if USBFS provides assistance in
completing
|
Plus out-of-pocket expenses,
if required, including but not limited to:
·
|
Including,
but not limited to security pricing services (IDC, Bloomberg, LoanX,
etc.), postage and stationery, programming and special reports, retention
of records, federal and state regulatory filing fees, expenses from U.S.
Bancorp participation in client meetings, wash sales reporting
(GainsKeeper), and auditing and legal
expenses.
|
All fees
are billed monthly.
* Subject
to CPI increase, Milwaukee MSA (to be applied annually on the first and each
subsequent 12-month anniversary of launch date).
15
Exhibit
B
Administration
Servicing Agreement
List of Authorized
Officers
Name
|
Title
|
|
Xxxxx
Xxxxxxx
|
President
and CEO (Fund)
|
|
Xxxxxx
XxXxxxx
|
VP
and CFO (Fund)
|
|
Xxx
Xxxxxxx
|
Portfolio
Manager (Fund)
|
|
Xxxxxxx
Xxxx
|
Director
of Operations (Adviser)
|
|
Xxxxxxx
Xxxxxxxxx
|
Manager,
Investment Operations (Adviser)
|
|
Mo
Omran
|
Manager,
Hedge Fund Operations/
|
|
Performance
& Analytics (Adviser)
|