EXHIBIT (2)(k)(1)
X.X. XXXXXX MULTI-STRATEGY FUND, L.L.C.
J.P. XXXXXX ALTERNATIVE ASSET MANAGEMENT, INC.
-AND-
PFPC INC.
ADMINISTRATION AGREEMENT
THIS AGREEMENT is effective as of the 26th day of May 2004.
BETWEEN:
X.X. XXXXXX MULTI-STRATEGY FUND, L.L.C., a Delaware limited liability company
(hereinafter called the "Fund"),
X.X. XXXXXX ALTERNATIVE ASSET MANAGEMENT, INC., a Delaware corporation
(hereinafter called the "Investment Manager"),
AND
PFPC INC., a Massachusetts corporation (hereinafter called the "Administrator").
WHEREAS:
(A) The Fund is organized as a limited liability company under the laws of
Delaware and is registered as a closed-end management investment
company under the Investment Company Act of 1940, as amended.
(B) The Fund wishes to appoint the Administrator as administrator of the
Fund to perform such administrative duties as are hereinafter set out.
(C) The Investment Manager has been appointed as the investment manager of
the Fund.
NOW IT IS HEREBY AGREED AS FOLLOWS:
Definitions
1. (a) In this Agreement and in all amendments hereto, the following
words and expressions shall, where not inconsistent with the
context, have the following meanings respectively:
"Auditor" shall mean PricewaterhouseCoopers LLP acting as the
independent certified public accountants of the Fund or any
other entity for the time being appointed as independent
certified public accountants of the Fund.
"Authorized Person" shall mean the Investment Manager, any
officer of the Fund and any other person authorized by the
Fund or the Investment Manager to give Oral or
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Written Instructions on behalf of the Fund. An Authorized
Person's scope of authority may be limited by setting forth
such limitation in a written document signed by both parties
hereto.
"Custodian" shall mean PFPC Trust Company, in its capacity as
custodian of the Fund's assets.
"Escrow Agent" shall mean PFPC Inc., in its capacity as escrow
agent for the Fund.
"Interests" shall mean all limited liability company interests
in the Fund.
"Investment Manager" shall mean X.X. Xxxxxx Alternative Asset
Management, Inc., the investment manager of the Fund.
"LLC Agreement" shall mean the Amended and Restated Limited
Liability Company Agreement of X.X. Xxxxxx Multi-Strategy
Fund, L.L.C., dated as of May 26, 2004.
"Managing Member" shall mean Xxxxxxx Associates, L.L.C. or any
successor managing member admitted to the Fund in accordance
with the LLC Agreement.
"Members" shall mean all persons admitted as members of the
Fund in accordance with the LLC Agreement.
"Oral Instructions" mean oral instructions received by the
Administrator from an Authorized Person.
"Written Instructions" mean (i) written instructions sent by
an Authorized Person and received by the Administrator, the
Custodian or the Escrow Agent, or (ii) trade instructions
transmitted by means of an electronic transaction reporting
system access to which requires use of a password or other
authorized identifier. Written Instructions under (i) above
may be delivered by any method described in Section 11 below.
"Portfolio Managers" shall mean portfolio managers in which
the Fund invests through the medium of investment funds or
through discretionary managed accounts.
"Private Placement Memorandum" shall mean the Private
Placement Memorandum published by the Fund as the same may be
amended from time to time.
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(b) Unless the context otherwise requires, words importing the
singular number shall include the plural and vice versa, words
importing the masculine gender shall include the feminine and
words importing persons shall include firms and companies and
vice versa.
(c) The division of this Agreement into sections, clauses and
sub-clauses and the insertion of headings are for convenience
of reference only and shall not affect the construction or
interpretation thereof.
Appointment
2. The Fund hereby appoints the Administrator to act as administrator in
respect of the Fund, subject to the terms and conditions set forth in
this Agreement. The Administrator accepts such appointment and agrees
to render the services herein described for the remuneration herein
provided.
Duties of the Administrator
3. (a) The Administrator shall administer the Fund in accordance with
the LLC Agreement and the Private Placement Memorandum and
shall perform such administrative duties as are set out in
Appendix A and Appendix B to this Agreement and such other
services as may be agreed in writing from time to time among
the parties to this Agreement.
(b) The Administrator shall for the purposes of this Agreement be
deemed to be an independent contractor and shall, unless
otherwise expressly provided or authorized, have no authority
to act on behalf of or to represent the Fund or the Managing
Member in any way or otherwise be deemed an agent of the Fund
or the Managing Member or to have any power to enter into any
transaction or otherwise bind the Fund or the Managing Member.
(c) The Administrator shall observe and comply with the LLC
Agreement and with the applicable provisions of the Private
Placement Memorandum of the Fund.
(d) The Administrator will perform such additional procedures with
respect to compliance as are mutually agreed upon in writing
by the Administrator, the
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Managing Member and the Investment Manager or otherwise
specified in this Agreement (including Appendix A and Appendix
B hereto).
(e) (i) Every year the Administrator shall conduct a review
pursuant to Statement on Auditing Standards 70, Part
II ("SAS 70") and will make available to the Fund for
inspection a report of such review and any updates
thereto.
(ii) For the segment of the Administrator's business that
uses the Investier platform, the Administrator will
complete its own SAS 70 after Sungard issues its SAS
70 on the Investier platform.
(iii) The Administrator shall immediately notify the Fund
of any changes in how it conducts its business that
would materially change the results of its most
recent SAS 70 review and any other changes to the
Administrator's business that would affect the Fund
or the Investment Manager's business.
Instructions
4. (a) Unless otherwise provided in this Agreement, the Administrator
shall act only upon Oral Instructions or Written Instructions
and any other relevant information in the possession of the
Custodian or the Escrow Agent (and, for purposes of this
Agreement, the Administrator shall be deemed to be in receipt
of any and all instructions, notices and other information
provided from time to time by the Investment Manager or the
Fund to the Custodian or the Escrow Agent).
(b) The Administrator shall be entitled to rely upon any Oral
Instruction or Written Instruction it receives from an
Authorized Person in accordance with this Agreement. The
Administrator may assume that any Oral Instructions or Written
Instructions received hereunder are not in any way
inconsistent with the provisions of the LLC Agreement or of
any vote, resolution or proceeding of the Fund's Board of
Directors or of the Fund's members, unless and until the
Administrator receives Written Instructions to the contrary.
(c) The Fund agrees to forward to the Administrator Written
Instructions confirming Oral Instructions (except where such
Oral Instructions are given by the Administrator or its
affiliates) so that the Administrator receives the Written
Instructions by the close of business on the business day
following the day that such Oral Instructions
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are received. The fact that such confirming Written
Instructions are not received by the Administrator or differ
from the Oral Instructions shall in no way invalidate the
transactions or enforceability of the transactions authorized
by the Oral Instructions or the Administrator's ability to
rely upon such Oral Instructions pending receipt of Written
Instructions; provided that the Administrator shall
immediately notify the Fund and the Investment Manager of any
discrepancies between any Oral Instructions and the Written
Instructions which purport to confirm those Oral Instructions,
and indicate whether it acted in accordance with the Oral
Instructions or the later Written Instructions.
(d) The Administrator shall promptly forward to the Custodian and
Escrow Agent, as applicable, any Oral Instructions or Written
Instructions received by the Administrator directed to or
otherwise intended for the Custodian or the Escrow Agent.
(e) The Administrator shall provide the Custodian and Escrow
Agent, as applicable, with appropriate oral and written
instructions as required to give effect to Oral Instructions
and Written Instructions received by the Administrator.
Standard of Performance
5. The Administrator shall be liable for any loss suffered by the Managing
Member, the Fund or its agents in the case of the Administrator's
negligence, willful default or willful misconduct, fraud, bad faith or
breach of any of its representations, duties and obligations under this
Agreement.
Compensation
6. For the services provided and the expenses assumed pursuant to this
Agreement, the Fund shall pay to the Administrator as full compensation
therefor such sums as may be agreed to in writing by the Fund and the
Administrator. Additionally, the Administrator shall be reimbursed for
all out of pocket expenses that the Managing Member and the
Administrator have agreed in advance shall be borne by the Fund
("Extraordinary Expenses"), provided such expenses are appropriately
documented.
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Amendments
7. This Agreement shall become effective upon the date hereinbefore
written and may be amended at any time by mutual agreement of the
parties hereto in writing.
Duration
8. (a) This Agreement will continue in full force and effect through
March 31, 2006 and shall be automatically renewed annually
thereafter on the same terms as specified herein. It may be
terminated at any time by any party to this Agreement without
the payment of any penalty, upon not less than ninety days'
written notice to the other parties, provided that:
(i) any party may at any time immediately terminate this
Agreement in the event of the appointment of an
examiner, liquidator or receiver to any other party
hereto or upon the happening of a like event at the
direction of an appropriate regulatory agency or
court of competent jurisdiction or upon any other
party hereto being unable to pay its debts as they
fall due or otherwise becoming insolvent or entering
into any composition or arrangement with or for the
benefit of its creditors or any class thereof;
(ii) the Fund or the Investment Manager may at any time
immediately terminate this Agreement in the event
that the Administrator is no longer permitted to
perform its obligations hereunder pursuant to
applicable law;
(iii) any party may at any time immediately terminate this
Agreement in the event of any other party committing
a material breach of this Agreement which is either
incapable of remedy (as admitted in writing by the
party committing the breach) or has not been remedied
within thirty days of a party serving notice on that
party requiring it to remedy same; and
(iv) the indemnity provisions of this Agreement and the
provisions determining the liability of the
Administrator shall survive the termination of this
Agreement.
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(b) Each party shall observe good faith towards the other parties
and shall inform the other parties immediately of the
occurrence of any of the events referred to in Section 8(a)
above.
Upon Termination
9. Upon termination of this Agreement, in the event of the Fund or the
Managing Member entering into any agreement with another party for the
provision of administrative services to the Fund, the Administrator
shall cooperate in the orderly transfer of administrative duties to
such other party and shall return all originals of books and records
regarding the Fund to the Fund, or in accordance with the Fund's
directions. All costs related to the transfer of all original books and
records (and any other information or data), shall be borne by the Fund
provided such costs are agreed in advance with the Fund and
appropriately documented. The Administrator agrees that in the event it
gives notice that it is terminating the Agreement pursuant to Section
8, it will continue to provide services to the Fund until such time as
a replacement administrator is in place and shall be compensated during
this period at the contractual rate.
Responsibility of the Administrator and Indemnity
10. (a) The Administrator shall not, in the absence of negligence,
willful default or willful misconduct, fraud, bad faith or
breach of this Agreement on the part of the Administrator or
its members, officers, employees, agents or delegates, be
liable to the Fund or to any Member for any act or omission in
the course of or in connection with the services rendered by
it hereunder or for any loss or damage which the Fund may
sustain or suffer as the result or in the course of the
discharge by the Administrator or its members, officers,
employees, agents or delegates of its duties hereunder or
pursuant hereto.
(b) The Fund agrees to indemnify the Administrator from and
against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses
(including attorneys' fees) or disbursements of any kind or
nature whatsoever (other than those resulting from the
negligence, willful default or willful misconduct, fraud, bad
faith or breach of this Agreement on the part of the
Administrator or its members, officers, employees, agents or
delegates) which may be imposed on, incurred by or asserted
against the Administrator in performing its
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obligations or duties hereunder. The Fund's liability under
this indemnity shall not exceed an amount equal to the sum of
the net worth of the Administrator plus the Applicable
Insurance (as defined herein) maintained by the Administrator
as of the time the claim giving rise to indemnity hereunder is
alleged to have arisen. "Applicable Insurance" means insurance
underwritten by an insurer in an arms' length transaction and
in the ordinary course of such insurer's business, which
covers claims of the type that the Fund or third parties could
assert against the Administrator related to this Agreement and
the services provided hereunder.
(c) The Administrator shall indemnify the Fund, the Managing
Member and the principals and officers of the Managing Member
and hold them harmless from and against all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs and expenses (including reasonable attorney's
fees or disbursements of any kind or nature whatsoever (other
than those resulting from negligence, willful default, fraud
or bad faith on the part of the Fund, the Managing Member or
its principals or officers)) incurred by the Fund, the
Managing Member, the members and officers of the Managing
Member or their respective agents or delegates arising
directly or indirectly from negligence, willful default or
willful misconduct, fraud, bad faith or breach of this
Agreement on the part of the Administrator (or any of its
members, officers, employees, agents or delegates).
(d) (i) The Administrator, its members, officers or employees
shall not admit liability for, settle any claim or incur any
costs or expenses in connection therewith, without the written
consent of the Fund who shall be entitled, at its own expense
and at any time, to take over and conduct in the name of the
Administrator, its members, officers or employees, the defense
or settlement of any such claim on such reasonable terms as
the Administrator may require including, without prejudice to
the generality of the foregoing, terms as to indemnity.
Without the prior written consent of the Administrator, the
Fund may not settle any claim in which the Administrator is a
party for an amount in excess of the Fund's indemnity
obligation to the Administrator pursuant to Section 9(b).
(ii) The Administrator, its members, officers or employees
shall give to the Fund notice in writing as soon as
reasonably possible:
(1) of the details of any claims, summonses or
writs made against any of them in relation
to the affairs of the Fund or of any
circumstances of
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which any of them may become aware which may
give rise to a claim or loss in relation to
the affairs of the Fund for which indemnity
will be sought;
(2) of the receipt of written notice from any
person of an intention to make a claim
against any of them; and
(3) of their intention to seek indemnity
hereunder;
(iii) Once the notice required by paragraph (ii) above has
been given to the Fund, the Administrator shall give
to the Fund as soon as reasonably practicable details
in writing of the circumstances which may give rise
to a claim for loss against the Administrator, its
members, officers or employees.
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Administrator nor its affiliates shall be liable
for any consequential, special or indirect losses or damages,
whether or not the likelihood of such losses or damages was
known by the Administrator or its affiliates.
(f) Notwithstanding anything in this Agreement to the contrary,
except as may arise from the Administrator's willful
misfeasance, fraud, bad faith, negligence or reckless
disregard, (i) the Administrator shall not be liable for
losses, delays, failure, errors, interruption or loss of data
occurring directly or indirectly by reason of circumstances
beyond its reasonable control, including without limitation
acts of God; action or inaction of civil or military
authority; public enemy; war; terrorism; riot; fire; flood;
sabotage; epidemics; labor disputes; civil commotion;
interruption, loss or malfunction of utilities,
transportation, computer or communications capabilities;
insurrection; elements of nature; or non-performance by a
third party; and (ii) the Administrator shall not be under any
duty or obligation to inquire into and shall not be liable for
the validity or invalidity, authority or lack thereof, or
truthfulness or accuracy or lack thereof, of any instruction,
direction, notice, instrument or other similar information
which the Administrator reasonably believes to be genuine.
Notices
11. (a) Any notice, consent, instruction or other instrument or
communication required or permitted to be given hereunder by a
party may be delivered in person, sent by courier service or
certified or registered post, postage-prepaid, faxed or
transmitted
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via e-mail to the address of the other parties set forth below
or such other address as may be notified in writing to the
other parties, and shall be deemed to have been properly
delivered or given hereunder and shall be effective on: (i)
the date of delivery if delivered in person or sent by Federal
Express or other recognized courier who obtains a signature
acknowledging receipt; (ii) the date of transmission, if faxed
or transmitted via e-mail, provided that receipt of a
facsimile or e-mail is verified by telephone (and failing such
verification, only upon actual receipt); or (iii) five days
after the same has been tendered for delivery by the post if
sent by certified or registered post, postage prepaid.
(b) Notices to the Fund shall be sent to:
X.X. XXXXXX MULTI-STRATEGY FUND, L.L.C.
c/o X.X. Xxxxxx Alternative Asset Management, Inc.
Attn: Xxxx X. Xxxxxxx, Chief Administrative Officer
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
Email: Xxxx.Xxxxxxx@xxxxxxxx.xxx
with a copy, in the case of any notice from the Investment
Manager, to the Administrator at the address set forth below
in subsection (c).
(c) Notices to the Administrator shall be sent to:
PFPC INC.
Attn: Xxxx X. Xxxxxxxx
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Fax: 000-000-0000
E-mail: Xxxx.Xxxxxxxx@xxxx.xxx
(d) Notices to the Investment Manager shall be sent to:
X.X. XXXXXX ALTERNATIVE ASSET MANAGEMENT, INC.
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Attn: Xxxx X. Xxxxxxx, Chief Administrative Officer
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
E-mail: Xxxx.Xxxxxxx@xxxxxxxx.xxx
Services Not Exclusive
12. The services of the Administrator hereunder are not to be deemed
exclusive and the Administrator shall be free to render similar or
different services to others so long as its services hereunder are not
thereby impaired. The level of service and staffing support that the
Administrator shall provide to the Fund shall not be inferior in any
respect to the level of service and support provided by the
Administrator to any of its other clients.
Reliance on Information
13. The Administrator may from time to time rely on information provided to
it by or on behalf of other parties appointed as agents by the Managing
Member or the Fund in the course of discharging its duties hereunder,
provided that it acts reasonably and in good faith and is not guilty of
any negligence, willful default or willful misconduct, fraud, bad faith
or reckless disregard in the performance (or non-performance) of its
duties and obligations hereunder.
Control by Managing Member, Consultation with Investment Manager
14. In the performance of its duties hereunder, the Administrator shall at
all times be subject to the control of and review by the Fund and the
Managing Member, and the Administrator shall in all respects observe
and comply with the LLC Agreement and the Private Placement Memorandum,
comply and conform to all reasonable and proper orders, directions and
regulations of the Fund and the Managing Member, well and faithfully
serve the Fund and use all reasonable endeavors to promote the
interests thereof.
In addition, if:
(a) it comes to the attention of the Administrator that any
administrative or accounting duty normally performed for
investment funds similar to the Fund or any duty due to
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regulatory or accounting changes is not being performed for
the Fund by the Administrator pursuant to this Agreement, as
it may be amended from time to time, or
(b) the Administrator is not able to perform its duties under this
Agreement because it is not receiving the required
information, cooperation or other input or assistance from the
Fund, or
(c) the Administrator requires additional information or direction
from the Fund,
then the Administrator shall promptly so inform the Fund so that the
Fund may take the appropriate actions.
The Administrator shall regularly consult with the Investment Manager
regarding, and shall inform the Investment Manager of, the performance
of its duties hereunder including, without limitation, the incurrence
of liabilities.
Right to Receive Advice
15. (a) Advice of the Fund. If the Administrator is in doubt as to any
action it should or should not take, the Administrator shall
request directions or advice, including Oral Instructions or
Written Instructions, from the Fund and/or the Investment
Manager.
(b) Advice of Counsel. If the Administrator is in doubt as to any
question of law pertaining to any action it should or should
not take, the Administrator may, following consultation with
the Investment Manager in accordance with subsection (d)
below, request advice from counsel of its own choosing (who
may be counsel for the Fund, the Investment Manager or the
Administrator, at the option of the Administrator). The
reasonable costs and expenses of counsel will be borne by the
Fund.
(c) Conflicting Advice. In the event of a conflict between
directions or advice or Oral Instructions or Written
Instructions the Administrator receives from the fund and the
advice the Administrator receives from counsel, the
Administrator may, following consultation with the Investment
Manager in accordance with subsection (d) below, rely upon and
follow the advice of counsel.
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(d) Consultation with the Investment Manager. Notwithstanding
subsections (a) to (c) above, the Administrator agrees to act
in accordance with all Oral Instructions and Written
Instructions or to notify the Investment Manager as soon as
possible (and in any event prior to any deadline for execution
of such instructions) of any inability to act in accordance
with, or any uncertainty with respect to, such instructions.
Prior to seeking any advice of counsel pursuant to subsection
(b) above, and prior to acting on the advice of counsel
pursuant to subsection (c) above, the Administrator agrees to
provide notice to the Investment Manager and consult with the
Investment Manager (i) regarding the choice of counsel and the
likely cost involved, and (ii) to clarify and/or resolve the
Administrator's concern with the relevant Oral Instructions or
Written Instructions or the conflict between such instructions
and the advice of counsel.
(e) Protection of the Administrator. Subject to Section 10(c), the
Administrator shall be indemnified by the Fund and without
liability for any action the Administrator takes or does not
take in reliance upon directions or advice or Oral
Instructions or Written Instructions the Administrator
receives from or on behalf of the Fund or upon advice of
counsel and which the Administrator believes, in good faith,
to be consistent with those directions or advice and Oral
Instructions or Written Instructions. Subject to subsection
(d) above, nothing in this Section 15 shall be construed so as
to impose an obligation upon the Administrator to seek such
directions or advice or Oral Instructions or Written
Instructions.
(f) Nothing in this Section 15 shall absolve the Administrator
from acting in accordance with the applicable standard of care
as is specifically set forth in this Agreement.
Confidentiality
16. The Administrator hereby agrees that it shall not, except as required
by law or applicable regulations, disclose to any person (and shall
prevent the disclosure or publication by its employees, agents, and/or
delegates) any confidential information relating to the Fund or the
Members of which the Administrator (and/or its agents, employees and/or
delegates) may become possessed in the performance of its duties under
this Agreement. This Section 16 shall survive the termination of this
Agreement.
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Non-Solicitation
17. During the term of this Agreement and for a period of one year after
the termination hereof, the Fund and the Investment Manager shall not
directly or indirectly, either for themselves or on behalf of any other
firm, person or entity, solicit to employ or retain as a consultant or
independent contractor, any person who currently is or during the
preceding six (6) month period was, known by the Fund or the Investment
Manager to be in the employ of the Administrator and/or its affiliates.
The Fund and the Investment Manager acknowledge and agree that due to
the uniqueness of the services to be provided by the Administrator's
employees and the confidential nature of the information such employees
will possess, the covenants set forth in this Section 17 are reasonable
and necessary for the protection of the business and goodwill of the
Administrator. The Fund and the Investment Manager expressly
acknowledge the importance to the Administrator of the covenants set
forth in this Section 17 and recognize that the Administrator would not
enter into this Agreement without the Fund and the Investment Manager's
consent hereto.
Property of Books and Records
18. The books and records (excluding the computer software and systems used
by the Administrator to maintain such books and records hereunder)
pertaining to the Fund, which are in the possession or under the
control of the Administrator, shall be the property of the Fund. Such
books and records shall be prepared and maintained as required by
applicable laws and regulations. The Fund and any persons authorized by
the Fund shall have access to such books and records upon two business
days' notice during the Administrator's normal business hours. Upon the
reasonable request of the Fund or the Investment Manager, copies of any
such books and records shall be provided by the Administrator to the
Fund or the Investment Manager or any persons authorized by the Fund.
Applicable law and jurisdiction
19. This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Delaware. The
parties hereto irrevocably submit to the non-exclusive jurisdiction of
the courts of the States of New York and Delaware.
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Representations
20. Each of the parties represents and warrants that it is duly organized
and validly existing under the laws of its own jurisdiction with full
power to carry on its business as now conducted, to enter into this
Agreement and to perform its obligations hereunder. In addition each of
the parties represents and warrants that this Agreement has been duly
and validly authorized, executed and delivered by it, constitutes a
valid and legally binding obligation on it enforceable in accordance
with its terms and no statute, regulation, rule, order, judgement or
contract binding on it prohibits its execution or performance of this
Agreement.
21. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but this Agreement may be changed, waived,
discharged or terminated by an instrument in writing signed by each
party.
22. A waiver by any party of any breach of any of the terms, provisions or
conditions of this Agreement or the acquiescence of such party in any
act (whether commission or omission) which but for such acquiescence
would be a breach as aforesaid shall not constitute a general waiver of
such term, provision or condition or of any subsequent act contrary
thereto.
23. Each of the provisions of this Agreement are separate and severable and
enforceable and, accordingly, if at any time any provision is adjudged
by any court of competent jurisdiction to be void or unenforceable the
validity, legality and enforceability of the remaining provisions
hereof shall not in any way be affected or impaired thereby.
24. This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original, and all of which together shall be
deemed to be one and the same instrument.
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IN WITNESS whereof this Agreement has been executed by the parties
hereto in the manner hereinafter appearing on the day and year first above
written.
SIGNED by the authorized representative of By: Xxxxxxx Associates, L.L.C.,
X.X. XXXXXX MULTI-STRATEGY FUND, L.L.C. its Managing Member
/s/ Xx. Xxxxxx X. Xxxxxxx
-------------------------------
Signature
Name: Xx. Xxxxxx X. Xxxxxxx
Title: Chairman and Sole Member
SIGNED by the authorized representative of /s/ Xxxx Xxxxxxx
X.X. XXXXXX ALTERNATIVE ASSET MANAGEMENT, INC. -------------------------------
Signature
Name: Xxxx Xxxxxxx
Title: President and Chief
Executive Officer
SIGNED by the authorized representative of /s/ Xxxx Xxxxxxx
PFPC INC. -------------------------------
Signature
Name: Xxxx Xxxxxxx
Title: Senior Vice President
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APPENDIX A
ALL SERVICES SHOULD BE PROVIDED ON A FUND/ CAPITAL ACCOUNT/ CAPITAL CONTRIBUTION
LEVEL
ACCOUNTING AND ADMINISTRATIVE SERVICES
During the continuance of this Agreement, the Administrator shall:
(i) calculate the net asset value of the Fund and each Member's capital
account balance in accordance with the requirements of the LLC
Agreement;
(ii) in respect of investments in other investment funds, obtain monthly
prices from each underlying fund's administrator or Portfolio Manager
which shall be checked with the Investment Manager. Additionally, if
security market quotes, currency exchange rates and other pricing
information from independent pricing services are needed the source
must be approved by the Investment Manager;
(iii) obtain written confirmation of all transactions by the Fund, including
but not limited to subscriptions, redemptions and transfers into/out of
underlying investment funds from the underlying fund's administrator or
Portfolio Manager which includes monies
subscribed/redeemed/transferred, shares subscribed/redeemed/transferred
and the net asset value at which the subscription/redemption/transfer
was transacted and other pertinent information provided by the
underlying fund's administrator or Portfolio Manager. The Administrator
shall send copies of such written confirmations to the Investment
Manager at the address specified in Section 11(d) of this Agreement, to
the attention of the Operations Manager (currently Xxxxxxx Xxxxxx), and
shall provide the Investment Manager every other business day with a
report showing all transactions by the Fund and the status of all
written confirmations. If written confirmation is not received from an
underlying fund's administrator within three business days of the
effective date of a transaction, the Administrator shall send a letter
to the underlying fund's administrator within five days of the
effective date with a copy to the Investment Manager at the address
specified in Section 11(d) of this Agreement, to the attention of the
Operations Manager (currently Xxxxxxx Xxxxxx). Such letter shall state
that the Fund has submitted all of the appropriate documentation for
the transaction by the effective date and that the Fund assumes
effective receipt of the documentation and must receive written
confirmation for the transaction within two business days from receipt
of such letter. For the avoidance of doubt, written confirmations from
an underlying fund's administrator or Portfolio Manager that does not
include an acknowledgement that the transactions have been properly
effected as per the underlying fund's instructions for such
transactions shall not be deemed acceptable confirmations by the
underlying funds;
(iv) maintain historical tax lots for each investment in an underlying fund;
(v) calculate on the basis of the information referred to under (iii) above
the market value of the Fund's investments and the appreciation and
depreciation of the investments in accordance with applicable valuation
policies set forth in the LLC Agreement or written
policies and guidelines provided by the Fund or by the Investment
Manager to the Administrator from time to time;
(vi) engage in a monthly review process with the Investment Manager which
includes the following actions:
(a) compare Portfolio Manager returns provided
by the Administrator to those received
independently by the Investment Manager.
Review all differences and get resolution
between the two;
(b) review transfer documentation and as
requested by the Investment Manager, other
documentation as mutually agreed upon
between the Administrator and the Investment
Manager;
(c) compare and reconcile client and Portfolio
Manager subscription and redemption amounts
provided by the Administrator and Investment
Manager;
(d) prepare and review all fee calculations and
incentive allocation accruals;
(e) prepare and review all balance sheet and
income accounts and the supporting
documentation;
(f) prepare and review monthly swap valuations
based upon valuations received from a
pricing source approved by the Investment
Manager;
(g) monitor the expense accruals and reserves
and notify the Fund of any proposed
adjustments; and
(h) calculate capital gains and losses.
Once reviewed by the Investment Manager, the Administrator will
finalize the Fund's net asset value for the month and put out a final
monthly package;
(vii) provide the Investment Manager with a Monthly Accounting Package which
includes:
Financials:
Balance Sheet
Statement of Income
Statement of Changes in Fund Capital
Supporting Schedules:
Net asset value of the Fund and each Member's capital account
balance
2
Member subscription, transfer and repurchase summaries
Schedule of Members (showing % interest in the Fund, the
twenty Members with the largest % interests, domicile
of each Member and indicating whether each Member is
(i) tax-exempt, (ii) subject to ERISA or otherwise a
benefit plan investor, (iii) a foundation, and/or
(iv) a X.X. Xxxxxx Private Bank client, and the
aggregate % interests held by Members in each of
(i)-(iv) above)
Underlying funds subscription, transfer and redemption
summaries
Cash account reconciliation
Portfolio Valuation at Market schedule
Monthly accounting data file
Unrealized gain/loss schedule
Management Fee and Incentive Allocation calculations
Detailed accounts receivable, accounts payable and
amortization schedules with aging schedules
Summary of all expenses paid during the month
Swap valuations
Trail commission reports
Rate of Return calculations
The Administrator shall provide the Investment Manager with the various
items constituting the Monthly Accounting Package in accordance with
the timeline specified in Appendix B, as amended from time to time;
(viii) provide the Investment Manager on a monthly basis with calculations of
any rebate of the Management Fee or Incentive Allocation that may be
agreed with any Member;
(ix) maintain all books and records as may be required by law or by the
Fund, the Investment Manager or Auditor with respect to the Fund's
investment transactions and render and distribute in respect of the
Fund such periodic and special reports as the Fund or the Investment
Manager may reasonably request and as set forth in the Private
Placement Memorandum. Any such books or records may be maintained in
the form of electronic media and stored on any magnetic disk or tape or
similar recording method;
(x) arrange with the Auditor for and provide reasonable assistance to the
Auditor with respect to the annual audit of the Fund and assisting the
Fund in procuring compliance with all
3
relevant legal and accounting requirements and other regulatory
authorities to which the Fund, the Managing Member or Investment
Manager may be subject;
(xi) arrange for the preparation, in consultation with the Auditor, the
Managing Member and the Investment Manager, of the annual reports of
the Fund in accordance with the requirements of any relevant laws;
(xii) prepare and distribute the monthly and/or quarterly unaudited reports
to all Members as outlined in the LLC Agreement and/or Private
Placement Memorandum or more frequently if so requested by the
Investment Manager;
(xiii) generally co-ordinate all periodic tender offers and repurchases of
Interests in accordance with the procedures described in the Private
Placement Memorandum and the LLC Agreement or as otherwise notified to
the Administrator in Written Instructions;
(xiv) coordinate the printing, mailing and tracking of periodic tender
offers;
(xv) prepare and file Schedule TO with the SEC via Xxxxx;
(xvi) collect responses to periodic tender offers;
(xvii) calculate the pro-rata tender amounts in the event a tender offer is
oversubscribed;
(xviii) prepare and distribute to Members any promissory notes issued by the
Fund in connection with any repurchases of Interests;
(xix) maintain on the books and records of the Fund a distinct account
consisting of assets of the Fund in an amount equal to the aggregate
estimated unpaid dollar amount of any promissory notes issued to
Members by the Fund in connection with any repurchases of Interests;
(xx) coordinate with the Fund's escrow agent the deposit of cash amounts
into the Repurchase Account, the calculation and deduction of any
repurchase fee due from a Member and the withholding of any other
required amounts from any repurchase proceeds payable to any Member;
(xxi) assist the Fund in determining whether any suspension of tender offers
and repurchases should take place due to delays in the receipt of
underlying investment valuations and/or revised valuations from
underlying investments and/or any other circumstances that affects the
ability of the Fund to value its assets accurately;
4
(xxii) calculate and, upon written instructions, arrange for and make the
payment of any fees, expenses or allocations payable by the Fund;
(xxiii) upon written instructions from the Investment Manager, perform any
ancillary services related to the Fund's investment activities,
including (a) arranging for and making all payments (by wire transfer
or otherwise from the Fund's bank account) relating to the Fund's
underlying investments, (b) arranging for, receiving and depositing
into the Fund's bank account all redemption/withdrawal payments,
dividends or other proceeds from the Fund's underlying investments, (c)
effecting any transfers into or out of underlying investments on behalf
of the Fund, and (d) such other services as are mutually agreed upon;
(xxiv) upon the receipt of appropriate documentation, perform any ancillary
services related to Fund investor activities, including (a) arranging
for, receiving and depositing into the Fund's bank account all capital
contributions of Members, (b) arranging for and making all repurchase
payments or other distributions to Members, (c) effecting any transfer
of ownership of the Interests, and (d) such other services as are
mutually agreed upon;
(xxv) allocate income, expenses, gains and losses within each Member's
capital account in accordance with the procedures set forth in the LLC
Agreement, and such additional procedures as may be agreed among the
parties from time to time and perform such other activities as outlined
in the LLC Agreement;
(xxvi) update daily and provide to the Investment Manager the cash
availability (including future projected redemption proceeds) as
required by the Investment Manager, including such details as
reasonably requested by the Fund or the Investment Manager;
(xxvii) determine and report applicable foreign exchange gains and losses on
payables and receivables;
(xxviii) as appropriate, compute yields, total return, expense ratios, portfolio
turnover rate, and, if required, portfolio average dollar-weighted
maturity;
(xxix) supply various normal and customary Fund statistical data as requested
on an ongoing basis, in an electronic format;
(xxx) in general provide such services as are required for the keeping of the
accounts of the Fund and the calculation of its net asset value in
accordance with the requirements of applicable laws and regulations and
the terms of the LLC Agreement;
5
(xxxi) review and execute such subscription, redemption and transfer documents
as may be required by an underlying fund's administrator or Portfolio
Manager to effect any activities of the Fund in connection with its
investments in such underlying fund and any other documents requested
by the Investment Manager;
(xxxii) prepare and distribute annual tax estimates to each Member by December
15th of each year for the current tax year (the "Tax Estimate"). The
Tax Estimate (based on information received from underlying funds) will
include, but not be limited to, the following line items:
- ordinary, interest and dividend income;
- short term capital gain (loss);
- long term capital gain (loss);
- section 988 items;
- net gain (loss) under section 1256;
- investment expense; and
- ordinary deductions;
(xxxiii) provide to the Auditor as soon as available, any information and
documentation necessary for preparation of Form K-1s for the Members.
(xxxiv) Mail annually to each Member a Form K-1 as provided by the Auditor.
REGISTRAR AND TRANSFER AGENCY SERVICES
During the continuance of this Agreement, the Administrator shall:
(i) maintain a register of Members and enter on such register all capital
contributions, repurchases and transfers of Interests;
(ii) administer all capital contributions, transfers of Interests, tender
offers and repurchases and reconcile the register with the records held
for the determination of the net asset value for the Fund and the
capital account balance of each Member;
(iii) review subscription documents received from the Fund's investors and
process any transfer documents relating to the assignment and transfer
of Interests;
(iv) prepare (where applicable) and distribute reports to Members monthly as
outlined in the LLC Agreement and at such other times as required by
the Managing Member;
(v) transmit to the Fund for the account of the Fund all checks and monies
received by it on behalf of the Fund;
(vi) forward to the Members such notices, reports (including the monthly,
quarterly and annual reports or financial statements) and other written
material as may be required by law, the Managing Member, the Investment
Manager or by the LLC Agreement or the Private Placement Memorandum;
and
6
(vii) perform additional duties, as mutually agreed upon, which may be
required from time to time under the terms of the LLC Agreement or the
Private Placement Memorandum.
FUND ADMINISTRATIVE SERVICES
During the continuance of this Agreement the Administrator shall:
(i) forward directly to the Managing Member and Investment Manager any and
all notices, correspondence and other communications received from
Members and third parties that the Administrator may receive on behalf
of the Fund;
(ii) Upon instruction from the Investment Manager, dispatch all such
circulars, notices of meetings, reports, financial statements and other
written material to all persons entitled to receive the same under
applicable law as the Fund may require;
(iii) prepare and file the Fund's Annual and Semi-Annual Reports with the SEC
on Form N-SAR via XXXXX;
(iv) prepare and file the Fund's Annual and Semi-Annual Reports with the SEC
on Form N-CSR;
(v) provide, to the extent contained in the Fund's accounting records held
by the Administrator, materials required for reporting to the Managing
Member as may be reasonably requested from time to time;
(vi) act as may be required by the Fund from time to time as proxy agent in
connection with the holding of meetings of Members, receive and
tabulate votes cast by proxy and communicate to the Fund the results of
such tabulation (additional fees would apply for these services when
appropriate and mutually agreed upon);
(vii) provide to the Auditor the Form K-1s and tax estimates to the extent
received from the underlying investment funds and administer the
payment on behalf of the Fund of any applicable tax that may be levied;
(viii) liase with the custodian and/or banks of the Fund to (a) obtain from
the custodian and/or bank all necessary information enabling the
Administrator to provide its services hereunder and (b) provide to the
custodian and/or bank all necessary information enabling it to perform
its duties to the Fund;
(ix) control all disbursements and authorize such disbursements from the
Fund's account with the custodian(s) upon Written Instructions;
(x) control and coordinate all movements of cash into and out of the Fund's
account with the custodian(s) and escrow agent, and provide them with
appropriate oral and written instructions, to effect all transactions
on behalf of the Fund in accordance with Oral Instructions and Written
Instructions;
7
(xi) coordinate contractual relationships and communications between the
Fund and its contractual service providers including auditors, tax
professionals, escrow agent and custodians, as applicable; and
(xii) prepare and present quarterly an Administrator's Report.
In connection with the above Fund Administrative Services, the Administrator
may, with the prior written approval of the Investment Manager, engage a
sub-contractor to perform some or all of the services, provided, however, the
Administrator shall remain responsible for the acts or omissions of any such
sub-contractors as if the Administrator had provided the service directly.
REGULATORY ADMINISTRATIVE SERVICES
During the continuance of this Agreement the Administrator shall:
(i) arrange for a representative of the Administrator to attend any
meetings of the Board of Directors of the Fund and prepare agendas,
minutes and resolutions required at or in connection with such
meetings; the out of pocket expenses incurred in connection with such
attendance, including but not limited to travel, etc., shall be born by
the Fund provided the total expenses are not in excess of the maximum
amount agreed upon in advance by the Fund and the costs are properly
documented by receipts;
(ii) coordinate the preparation, assembly and mailing of Board materials;
(iii) assist in the preparation of notices of Annual Meetings of Members of
the Fund and Proxy materials relating to such meetings;
(iv) arrange for a representative of the Administrator to attend the Annual
Meetings of Members of the Fund;
(v) assist in the preparation of post-effective registration amendments and
other documentation required for tender offers for the Fund subject to
the review of Fund management and Fund counsel;
(vi) monitor the Fund's assets to assure adequate fidelity bond coverage is
maintained;
(vii) maintain the Fund's corporate calendar to assure compliance with
various filing and Board approval deadlines;
(viii) assist the Fund, the Managing Member and the Investment Manager in
preparing for and complying with regulatory examinations, and provide
assistance with regulatory agencies during their normal review of the
Fund, the Managing Member and the Investment Manager; and
(ix) perform such other services upon terms and conditions and for such fees
as the parties may agree to from time to time (for example, Form N-Q).
8
APPENDIX B
X.X. XXXXXX ATLAS MULTI-STRATEGY FUND, L.L.C.
FUND NAV AND MONTHLY ACCOUNTING PACKAGE TIMELINE
TIMING STEP ACTION
--------------------------------- --------------------------------------------------- -----------------------------------------
1. 14TH CALENDAR DAY OF THE MONTH - CUT PRELIMINARY FUND NAV AND PREPARE MONTHLY - Administrator cuts the preliminary Fund
ACCOUNTING PACKAGE WITH VALUATIONS NAV and prepares Monthly Accounting
FROM UNDERLYING HEDGE FUNDS Package (except the Schedule of Members
and capital account balances of the
Members) with the valuations from the
underlying hedge funds
- INVESTMENT MANAGER REVIEWS THE PRELIMINARY FUND - Administrator sends to Investment
NAV AND MONTHLY ACCOUNTING PACKAGE FROM Manager
ADMINISTRATOR
- Investment Manager receives the
preliminary Fund NAV and Monthly
Accounting Package from Administrator
- Investment Manager reviews the
preliminary Fund NAV and Monthly
Accounting Package by the 15th calendar
day and sends it back to Administrator
2. 15TH CALENDAR DAY OF THE MONTH - CUT OFF FOR RECEIPT OF VALUATIONS FROM THE - Administrator receives all valuations
UNDERLYING HEDGE FUNDS from the underlying hedge funds by the
15th calendar day
- PRODUCE FINAL FUND NAV AND MONTHLY ACCOUNTING - Administrator produces the final Fund
PACKAGE NAV and Monthly Accounting Package
(except the Schedule of Members and
capital account balances of the
Members)
- Administrator sends to Investment
Manager for review
3. 16TH CALENDAR DAY OF THE MONTH - REVIEW AND DISTRIBUTE FINAL FUND NAV AND MONTHLY - Investment Manager receives and reviews
ACCOUNTING PACKAGE the final Fund NAV and Monthly
Accounting Package
- Once the final Fund NAV and Monthly
Accounting Package (except the Schedule
of Members and capital account balances
of the Members) is completed,
Investment Manager and Administrator
will distribute pursuant to operating
procedures
4. WITHIN 3 BUSINESS DAYS AFTER - PRODUCE SCHEDULE OF MEMBERS AND CAPITAL ACCOUNT - Administrator prepares the Schedule of
THE 16TH CALENDAR DAY OF THE BALANCES OF THE MEMBERS Members and a schedule of capital
MONTH account balances for each Member
- Administrator sends to Investment
Manager
- Investment Manager receives and reviews
Schedule of Members and schedule of
capital account balances for each
Member
2
