PLACEMENT AGENT AGREEMENT
AGREEMENT dated as of August ____, 2005, by and between Bear, Xxxxxxx &
Co. Inc. ("Bear Xxxxxxx") and Xxxxxxxxxx Investors, LLC, a Delaware limited
liability company (the "Investment Manager"). NOW, THEREFORE, the parties hereby
agree as follows:
1. Appointment As Placement Agent.
(a) The Investment Manager acts as the investment manager for each of
the companies named in Appendix A hereto (each, a "Fund"), each of which is
registered under the U.S. Investment Company Act of 1940, as amended (the "1940
Act") as a closed-end management investment company and issues and sells limited
liability company interests representing beneficial interests in such company
("Interests") in accordance with a prospectus issued by the Fund(s), as amended
and supplemented from time to time.
(b) The Investment Manager hereby appoints Bear Xxxxxxx, on a
non-exclusive basis, to represent the Investment Manager in connection with the
introduction of prospective investors ("Prospective Investors") to the Fund(s).
Prospective Investors means and may include individual and institutional
investors of all types, including individuals, trusts, estates, partnerships and
associations; banks, thrifts, insurance companies and other financial
institutions; investment companies and other pooled investment vehicles; all
tax-exempt organizations, such as those subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"); and other public and private
pension funds, endowments and foundations, together with their affiliates and
investment management consultants.
(c) Bear Xxxxxxx hereby accepts such appointment, pursuant to which it
will use reasonable efforts to introduce Prospective Investors to acquire
Interests in the Fund(s).
2. The Program(s).
(a) Bear Xxxxxxx has included the Fund(s) listed in Appendix A hereto
in its Alternative Investments Platform (the "Program"), pursuant to which Bear
Xxxxxxx makes various investment funds (registered and unregistered) available
for investment by its clients ("Program Clients"), including certain Prospective
Investors. Representatives of Bear Xxxxxxx may assist Program Clients in
selecting from the available investment funds, as set forth in the investor's
Program Client agreement. Program Clients are charged an asset-based fee by Bear
Xxxxxxx based on the value of the assets in their accounts.
(b) Bear Xxxxxxx will periodically review the investment funds included
in the Program (including the Fund(s)) and add investment funds to or subtract
investment funds from the Programs as it, in its sole discretion, deems
appropriate, and classify and reclassify them as Bear Xxxxxxx deems appropriate
and necessary for purposes of including them in a particular Program's
designated asset classes.
3. Duties of Bear Xxxxxxx.
(a) Bear Xxxxxxx shall use reasonable efforts on behalf of Investment
Manager to introduce Prospective Investors (which may include, but will not be
limited to, certain Program Clients) to invest in the Fund(s).
(b) Bear Xxxxxxx will identify for the Investment Manager the
Prospective Investors that Bear Xxxxxxx wishes to refer to the Investment
Manager and make available to the Investment Manager certain information
pertaining to Prospective Investors who express an interest in obtaining
additional information about a Fund, including information contained in the Fund
Disclosure Documents (as defined below). The Investment Manager agrees that it
will ask any prospective investor that contacts it or the Fund(s) on an
unsolicited basis whether it was introduced by Bear Xxxxxxx.
(c) In connection with such activities, at the start of any
introduction of a Prospective Investor, Bear Xxxxxxx shall provide such Investor
with a current copy of (i) the Investment Manager Brochure (as defined below),
as applicable; and (ii) the written disclosure document of Bear Xxxxxxx,
substantially in the form attached hereto as Exhibit I, and any amendment or
supplement to such documents, if applicable. Bear Xxxxxxx further agrees to
obtain, as applicable, from each Prospective Investor that Bear Xxxxxxx seeks to
introduce to the Fund(s) a signed and dated acknowledgement that it has received
such documents, and to deliver such acknowledgement promptly to the Investment
Manager.
(d) Bear Xxxxxxx shall use reasonable efforts subsequent to each
initial contact with a Prospective Investor to introduce such Prospective
Investor to the Fund(s), including but not limited to setting up personal
meetings between such Prospective Investors, Bear Xxxxxxx and/or the Investment
Manager.
(e) The Investment Manager, Board of Managers or other agents or
service providers duly authorized and appointed to act by and on behalf of the
Fund in accordance with the Fund's constitutional documents shall be responsible
for qualifying and accepting a Prospective Investor as an investor in each
applicable Fund. The Investment Manager shall be solely responsible for ensuring
that the Fund Disclosure Documents (as defined below) are forwarded to a
Prospective Investor that is identified by Bear Xxxxxxx, for reviewing any
documents completed by or on behalf of a Prospective Investor with respect to
any Fund, including applicable Fund subscription documents, and for accepting or
rejecting any Prospective Investor as an investor in a Fund. The Investment
Manager or Board of Managers, as applicable (i) may or may not accept, in its
sole discretion, the subscription of a prospective investor to invest in the
Funds; and (ii) may mandatorily redeem the investment of any prospective
investor at any time, subject to the terms set forth in the applicable offering
document pertaining to such Prospective Investor and applicable law. The term
"Bear Xxxxxxx Investor" as used herein shall refer to (x) a Prospective Investor
introduced by Bear Xxxxxxx pursuant to this Agreement whose assets are being
managed, through the Fund(s), by the Investment Manager and (y) any investor
that contacts the Investment Manager or the Fund on an unsolicited basis if such
investor was made aware of the Investment Manager or the Fund by Bear Xxxxxxx.
4. Information to Be Provided. The Investment Manager will provide Bear
Xxxxxxx the following information and documents with respect to itself and each
applicable Fund including, but not limited to, the information and documents set
forth in this Section 4 immediately below; and will furnish written paper and
electronic copies of any amendments to or changes in any of the documents
referred to in this Section as soon as practicable after such amendments or
changes become available:
(a) A list of officers or other representatives of the Investment
Manager who are authorized to instruct Bear Xxxxxxx in connection with the
services it is obligated to provide under this Agreement;
(b) A copy of (i) Parts I and II of Form ADV prepared for itself and/or
any sub adviser to each Fund, if applicable. (Part II of Form ADV shall herein
be referred to as the "Investment Manager Brochure") and (ii) the current sales
literature of the Investment Manager (collectively, with Parts I and II of Form
ADV, the "Manager Disclosure Documents");
(c) In sufficient copies as Bear Xxxxxxx may reasonably request. (i)
the current Investment Manager Brochure, if applicable, (ii) the current private
placement memorandum of each Fund (collectively, the "Private Placement
Memorandum"); and (iii) the current sales literature of each Fund (collectively,
with each Fund's Private Placement Memorandum, the "Fund Disclosure Documents").
It shall also furnish, on a timely basis, all updates and supplements thereto to
Bear Xxxxxxx, and in sufficient copies as Bear Xxxxxxx may reasonably request.
(d) The Investment Manager shall: (i) complete, or cause to be
completed, an initial questionnaire and any follow-up questionnaires, as
requested by or for Bear Xxxxxxx (including questionnaires delivered each
quarter requesting certain information such as Fund valuation, holdings,
performance, sector weightings, and asset allocation); and (ii) deliver such
completed questionnaires to Bear Xxxxxxx. Quarterly questionnaires will
generally be delivered by Bear Xxxxxxx by facsimile or electronic mail. The
Investment Manager shall deliver completed quarterly questionnaires to Bear
Xxxxxxx within approximately ten (10) days of the request.
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(e) The Investment Manager shall supply other relevant information
about the Investment Manager (the Manager Disclosure Documents, together with
all other information provided in writing or orally or electronically disclosed
by or on behalf of the Investment Manager to Bear Xxxxxxx, including but not
limited to, information set forth in the questionnaires and other information
contemplated in Section 4(d) herein, shall collectively be referred to herein
as, the "Investment Manager Information") and the Fund(s) (the Fund Disclosure
Documents, together with all other information provided in writing or orally or
electronically disclosed by or on behalf of the Fund to Bear Xxxxxxx, including
but not limited to, information set forth in the questionnaires and other
information contemplated in Section 4(d) herein, shall collectively be referred
to herein as, "Fund Information") upon request (including, but not limited to,
the operational forms attached hereto as Appendix B, and other questionnaires
and forms, all of which as they may be amended from time to time, no later than
the fifteenth (15th) calendar day of each calendar month using the format,
medium and calculation methods specified by Bear Xxxxxxx and shall facilitate
visits with Bear Xxxxxxx upon request. The Investment Manager further agrees to
promptly forward to Bear Xxxxxxx copies of any statements of account, originally
executed subscription documents and any and all other correspondence that it
supplies, forwards to or otherwise receives from Bear Xxxxxxx Investors.
(f) The Investment Manager shall furnish such opinions of legal counsel
in form and substance satisfactory to Bear Xxxxxxx in Bear Xxxxxxx' sole
discretion, a form of which is attached hereto as Appendix C (such opinions
shall pertain to, among other things, due formation, etc. and, as applicable,
compliance with the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), compliance with the 1940 Act, as amended).
(g) The Investment Manager and Fund shall be solely responsible for the
truthfulness, completeness, and accuracy of the Investment Manager Information
and Fund Information and shall be solely responsible for any liability resulting
from Bear Xxxxxxx' reliance on such Investment Manager Information and Fund
Information, including any claims that such information was false, misleading,
or otherwise in violation of any applicable law, regulation or rule.
(h) The Investment Manager will promptly provide any information to a
Prospective Client regarding: 1) any change or proposed change to a Fund's
investment objectives and any material changes or proposed changes to its
policies and restrictions; 2) any change or proposed change in to a Fund's
investment adviser, sub adviser (if applicable) or other key personnel; or 3) a
liquidation or other material change in a Fund.
(i) To the extent the Investment Manager or Fund engages a third party
administrative service provider ("Administrator") to provide services incident
to this Agreement, the Investment Manager and Fund shall remain responsible to
Bear Xxxxxxx and Bear Xxxxxxx Investors with respect to such services and,
provided, further, that the Investment Manager or Fund, as applicable subjects
any such Administrator to like conditions of confidentiality and non-use as set
forth in Section 12 herein.
5. Use of Parties' Names and Distribution of Information.
(a) Without Bear Xxxxxxx'x prior written consent, the Investment
Manager will not cause or permit the use, description, or reference to Bear
Xxxxxxx, or to the relationship contemplated by this Agreement, in any
advertisement or promotional materials or activities, including, without
limitation, any advertisement or promotional materials published, distributed,
or made available, or any activity conducted through, the Internet or any other
electronic medium.
(b) Bear Xxxxxxx shall not make any written representations regarding
the Investment Manager or a Fund without the prior written consent of Investment
Manager, except as follows:
(i) Bear Xxxxxxx may refer to any Fund as part of a list of funds
available through any Program;
(ii) Bear Xxxxxxx may disclose any fact or make any reference to
any information concerning any Fund that is contained in and
accurately derived from the Fund Information and Investment
Manager Information provided by Investment Manager to or for Bear
Xxxxxxx during any review of the Fund(s) or otherwise.
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(iii) Based on the Fund Information and Investment Manager
Information, Bear Xxxxxxx may prepare or have a vendor prepare at
Bear Xxxxxxx'x request, material that describes and analyzes
information about each Fund (each, a "Fund Profile"). Bear
Xxxxxxx will provide the Investment Manager with a copy of each
Fund Profile for the Investment Manager's approval when it is
initially prepared and thereafter at Bear Xxxxxxx'x discretion.
Once the Investment Manager has approved a Fund Profile, Bear
Xxxxxxx will, in its discretion, decide how to use the Fund
Profile, which may include making it available to Prospective
Investors. After receiving the Investment Manager's initial
approval of a Fund Profile, Bear Xxxxxxx will modify and/or
update that Fund Profile periodically and send the Fund Profile
to the Investment Manager for approval. The Investment Manager
shall approve the Fund Profile in writing within three business
days of receipt. Bear Xxxxxxx agrees that it shall not
disseminate the Fund Profile prior to receipt of express written
consent of the Investment Manager. Bear Xxxxxxx will have no
liability to the Investment Manager or any Fund with respect to
any information contained in the approved Fund Profiles.
6. Transparency. Subject to applicable law and the Investment Manager
and Fund providing any necessary disclosure to its investors, the Investment
Manager agrees to provide Bear Xxxxxxx access to all of the Fund(s)' web-based
prime broker, custodian, administrator or accountant reports and to accommodate
reasonable requests for reports on the Fund(s)' portfolio. For the avoidance of
doubt, the Investment Manager shall be under no obligation under this section or
any other section of this Agreement to disclose to Bear Xxxxxxx the names of the
investors in the Fund(s). The Investment Manager agrees to notify Bear Xxxxxxx
of any such matters, events, occurrences, or changes that the Investment
Manager, in its reasonable judgment, believes may be material to the Fund, to
Bear Xxxxxxx or to Bear Xxxxxxx Investors. The Investment Manager agrees to
permit Bear Xxxxxxx to review, during regular business hours and upon reasonable
notice, at a Fund's or the Investment Manager's place of business, such records
as Bear Xxxxxxx may request for the purpose of confirming compliance with the
terms of this Agreement and the Fund Documents. Bear Xxxxxxx agrees to permit
the Investment Manager to review, during regular business hours and upon
reasonable notice, at Bear Xxxxxxx' place of business, such records of Bear
Xxxxxxx Advisory Services as the Investment Manager may request for the purpose
of confirming compliance with the terms of this Agreement. The Investment
Manager understands and agrees that Bear Xxxxxxx may make certain of this
information available to current and prospective investors in Fund. The Fund and
the Investment Manager hereby undertake to provide and acknowledge and agree
that they are solely responsible for ensuring that any and all disclosures
required to be made to investors as a result of any information provided to Bear
Xxxxxxx pursuant to this Section 6 shall be made prior to the Fund providing
Bear Xxxxxxx with access to any of the such information. The Investment Manager
agrees that if a Fund and/or the Investment Manager enters into any agreement or
understanding with any other investor concerning the Fund and/or such investor's
rights and obligations as an investor in the Fund, Bear Xxxxxxx Investors shall
be entitled to any or all of the rights, remedies, privileges and benefits to
which such other investor is entitled under the terms of such agreement or
understanding as if such Bear Xxxxxxx Investor were themselves a party to such
agreement or understanding.
7. Representations and Warranties.
(a) The Investment Manager agrees, represents and warrants on behalf of
itself and the Fund (as applicable) that, as of the date hereof and for so long
as the Agreement is in effect:
(i) the Investment Manager is duly authorized to enter into this
Agreement, and otherwise to act on behalf of the Fund(s) by the
organizational documents, investment management agreement or
selling group agreement of the Fund(s) as applicable, or by some
other proper manner.
(ii) the Investment Manager is registered with the Securities and
Exchange Commission ("SEC") as an investment adviser under the
Advisers Act or is not required to be registered.
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(iii) the Fund Disclosure Documents, Investment Manager Brochure,
all Fund Information and Investment Manager Information, and any
amendments and supplements thereto, do not and will not contain
any misstatement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements made therein not misleading.
(iv) each Fund has been duly formed and is validly existing as an
investment entity in the relevant jurisdiction with its investors
having the respective rights and obligations described in its
offering documents. The Investment Manager will ensure that the
Investment Manager and will use its best efforts to ensure that
the Fund(s) will comply with all applicable laws, rules and
regulations including, but not limited to, the Advisers Act and
the 1940 Act.
(v) with respect to each Fund, if applicable, a registration
statement under the 1940 Act is currently effective and will
remain effective, and appropriate state securities law filings
have been made and will continue to be made, with respect to all
Fund shares being offered for sale, except as Investment Manager
may specifically advise Bear Xxxxxxx, in writing, with respect to
any state in which Fund shares are not registered or any required
notice has not been filed.
(vi) the Investment Manager's activities and all other actions
taken by or in connection with the Fund(s) will comply with Rule
506 and other applicable provisions of Regulation D under the
Securities Act, as amended ("Regulation D"). Without limiting any
of the foregoing, neither the Investment Manager nor the Fund(s)
will engage in any form of "general solicitation or advertising"
within the meaning of Regulation D when performing its duties
under this Agreement.
(vii) the payment to Bear Xxxxxxx of any fees pursuant hereto (1)
has been duly authorized by the Fund(s), the Investment Manager,
Boards of Managers of the Fund(s), or any other persons to the
extent such authorization is required to properly make such
payment, (2) is properly disclosed in the relevant Fund offering
material to the extent required, and (3) is in material
conformity with all federal, state and industry laws or
regulations to which the Fund or its agents are subject.
(viii) the Investment Manager is responsible for and acknowledges
that Bear Xxxxxxx is not responsible for: (i) any information
contained in, and the compliance with all applicable laws, rules
and regulations pertaining to any prospectus, registration
statement, annual report, proxy statement, or advertising or
marketing material of or related to any Fund (except for
advertising or marketing materials prepared by Bear Xxxxxxx to
the extent that any information contained therein is not
furnished to or for Bear Xxxxxxx by the Investment Manager); (ii)
the registration or qualifications of Fund shares under any
federal or applicable state laws; (iii) the distribution and
tabulation of proxies in accordance with all applicable laws,
rules and regulations (except for such proxy related services
provided by Bear Xxxxxxx or its mailing agent), and (iv) the
compliance by the Investment Manager and each "affiliated person"
thereof as that term is defined under the 1940 Act (an
"Affiliate") with all applicable laws, rules and regulations, and
the rules and regulations of each self-regulatory organization
with jurisdiction over the Fund and Affiliates. The Investment
Manager's responsibilities under this subsection include, but are
not limited to, information published, distributed, or otherwise
made available, and activities conducted through the Internet and
other electronic media.
(ix) the Investment Manager represents that any information or
written records it provides to Bear Xxxxxxx will be true,
accurate, and complete at the time of delivery. The Investment
Manager acknowledges that, in performing its services under this
Agreement, Bear Xxxxxxx will rely on any such information,
written records, and instructions provided to it by the
Investment Manager or any Fund, by their authorized employees,
officers, or agents, or by Clients.
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(x) the agreements, representations and warranties made in this
Agreement will be deemed continuing, and if at any time any event
occurs that would make, or tend to make any of the
representations and warranties not true, the Investment Manager
will promptly notify Bear Xxxxxxx in writing within ten days.
(b) Bear Xxxxxxx hereby agrees, represents and warrants that, as of the
date hereof and for so long as this Agreement is in effect:
(i) no subscription from a Prospective Investor will be effective
unless and until it is accepted by the Investment Manager or
Board of Managers, as applicable, and the Investment Manager or
Board of Managers, as applicable, in its sole discretion may
decline to accept any subscription submitted and may in its sole
discretion subsequently redeem a Bear Xxxxxxx Investor via a
tender offer from the Funds or otherwise terminate its or each
Fund's relationship with a Bear Xxxxxxx Investor, subject to the
terms set forth in each Fund Disclosure Documents pertaining to
such Bear Xxxxxxx Investor and applicable law.
(ii) it is registered as a broker-dealer with the SEC and a
member of the National Association of Securities Dealers, Inc.
(iii) its activities hereunder will comply with Rule 506 and
other applicable provisions of Regulation D. Without limiting any
of the foregoing, Bear Xxxxxxx will not engage in any form of
"general solicitation or advertising" within the meaning of
Regulation D when performing its duties under this Agreement.
(iv) it is, or at the time of offers and sales of any Interest
will be, in compliance with any requirements of federal and state
"blue sky" laws and the rules or regulations there under with
respect to its registration as a broker-dealer in connection with
the offer and sale of the Interests.
(v) it agrees not to introduce the Investment Manager to
Prospective Investors in states and/or other jurisdictions in
which it has been advised by the Investment Manager that offers
and sales of Interests are not permitted or otherwise qualified
to be made.
(vi) it undertakes to perform its duties hereunder in a manner
consistent with the instructions of the Investment Manager and
consistent with the provisions of applicable law.
(vii) the agreements, representations and warranties made in this
Agreement will be deemed continuing, and if at any time any event
occurs that would make, or tend to make any of the
representations and warranties not true, Bear Xxxxxxx will
promptly notify the Investment Manager in writing within ten
days.
8. INDEPENDENT CONTRACTOR; NON-EXCLUSIVE ARRANGEMENT. In performing the
services for the Investment Manager as described herein, Bear Xxxxxxx will be
regarded as an independent contractor and placement agent of the Investment
Manager. Bear Xxxxxxx will not have any right or authority to create any
obligations of any kind on behalf of the Investment Manager and will make no
representation to any third party to the contrary. The Investment Manager and
Bear Xxxxxxx each acknowledge and understand that Bear Xxxxxxx will provide
services on a non-exclusive basis, meaning that it may serve as placement agent
for other pooled investment vehicles, including those vehicles that have
substantially similar investment programs or strategies. The Investment Manager
and Bear Xxxxxxx each further acknowledge and understand that the Investment
Manager may utilize the services of other placement agents and solicitors in
connection with introducing prospects to the Fund(s) and to the Investment
Manager.
9. COMPENSATION. In payment for the services to be rendered hereunder,
the Investment Manager will compensate Bear Xxxxxxx an annualized amount equal
to 0.60% multiplied by the aggregate market value of each Bear Xxxxxxx
Investor's investments in the Fund(s) on each day that the Investment Manager
calculates its management fee with respect to the Fund(s). Investment Manager
agrees to pay Bear Xxxxxxx its portion directly from any management fee that it
charges to a Bear Xxxxxxx Investor, or to the Fund(s) in connection with a Bear
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Xxxxxxx Investor, within ten (10) calendar days of Investment Manager's receipt
of such fees or allocations. The obligation of the Investment Manager to pay
Bear Xxxxxxx hereunder shall remain for so long as a Bear Xxxxxxx Investor, or a
Fund in connection with the investment of a Bear Xxxxxxx Investor, is charged a
management fee, and shall survive the termination of this Agreement, unless the
Investment Manager is notified to the contrary by Bear Xxxxxxx or such payment
by the Investment Manager violates any applicable laws, rules and regulations.
The Investment Manager acknowledges and agrees that Bear Xxxxxxx will generally
offset investment advisory fees it earns with respect to Program Clients with
compensation it receives in connection with this Agreement that is attributable
to such Program Clients.
The parties hereto agree that the fee rates payable to Bear Xxxxxxx, as outlined
in this Section, in consideration for providing the services described in the
Agreement, will equal or exceed the fee rates and percentages payable by the
Investment Manager to any other third party placement agent for providing
substantially similar services to the Investment Manager pursuant to agreements
substantially similar to this Agreement up to a maximum annualized amount equal
to 0.75% multiplied by the aggregate market value of each Bear Xxxxxxx
Investor's investments in the Fund(s) on each day that the Investment Manager
calculates its management fee with respect to the Fund(s). The fee rates and
percentages payable to Bear Xxxxxxx and fee rates and percentages payable to
other third party placement agents for the provision of substantially similar
services to the Investment Manager shall be reviewed on an on-going basis by
Investment Manager to determine whether more favorable economic terms
("Different Terms") have been provided to other third party placement agents. If
the Investment Manager, in its sole discretion, determines that another third
party placement agent is receiving Different Terms, the Investment Manager shall
notify Bear Xxxxxxx in writing (the "Notice"), any such Notice shall be
deliverable solely via overnight courier, and, should Bear Xxxxxxx elect to
receive such Different Terms (as conditioned above), provide the Different Terms
to Bear Xxxxxxx retroactively as of the date that the Investment Manager entered
into such Different Terms with the applicable third party placement agent. Bear
Xxxxxxx shall be deemed to have rejected any offer of Different Terms unless,
within 90 days after receiving the Notice, it delivers written notice to
Investment Manager accepting such Different Terms.
10. TERM AND TERMINATION.
This Agreement will begin as of the date first written above and will
continue until termination. Bear Xxxxxxx may, by giving thirty (30) days' prior
written notice to the Investment Manager in Bear Xxxxxxx' sole discretion,
terminate this Agreement as to any or all Fund(s) or upon such shorter notice as
required by law, regulation, order, or instruction by a court of competent
jurisdiction. The Investment Manager may terminate this Agreement as to any or
all Fund(s) by giving Bear Xxxxxxx ninety (90) days' prior written notice, or
upon such shorter notice as required by law, regulation, order, or instruction
by a court of competent jurisdiction. If either party notifies the other party
of a material breach of this Agreement by such other party and such party does
not cure such breach within 14 business days of receipt of such notification,
the non-breaching party may terminate this Agreement effective immediately. This
Agreement will automatically terminate as to any or all Fund(s): (i) upon the
termination of the Investment Manager's employment by such Fund(s); (ii) upon
Bear Xxxxxxx' withdrawal as a broker-dealer registered with the SEC or (iii) in
the event of its assignment by either party. Termination of this Agreement will
result in the termination of all duties and authorities of each party, except as
specifically set forth in this Agreement. Bear Xxxxxxx will notify Bear Xxxxxxx
Investors of any such termination and may indicate one or more reasons for any
such termination. Bear Xxxxxxx will have no liability to the Investment Manager,
to any Fund managed, advised or otherwise sponsored, directly or indirectly, by
Investment Manager or its affiliates, to any other investment fund, investment
vehicle or separate account managed, advised or otherwise sponsored, directly or
indirectly, by Investment Manager or its affiliates, or to any investors of such
Funds or such other investment funds, investment vehicles or separate accounts
as a result of Bear Xxxxxxx' decision to terminate participation of any Fund in
the Programs or to otherwise determine to no longer make introductions of
Prospective Investors.
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11. INDEMNIFICATION.
(a) The Investment Manager agrees to indemnify and hold Bear Xxxxxxx (which term
for purposes of this Section 11 includes the directors, partners, controlling
persons (as such term is defined under the Securities Act of 1933, as amended),
officers, employees and agents of Bear Xxxxxxx) harmless from and against any
and all losses, claims, damages, costs, liabilities or expenses (including
reasonable attorney's fees and expenses), joint or several, to which Bear
Xxxxxxx may become subject under any of the federal and state securities laws,
under any other statute, at common law or otherwise resulting from the
Investment Manager's or Fund's material breach of this Agreement, material
violation of any federal or state securities laws, gross negligence or willful
misconduct or misfeasance or any dispute or misunderstanding between the
Investment Manager or Fund and any investor, including Bear Xxxxxxx Investors,
arising out of the Investment Manager's management and operation of or other
services the Investment Manager or other service provider (including, but not
limited to, its accountants, lawyers and/or administrators), provides directly
to or on behalf of the Investment Manager and/or Fund and/or the Investment
Manager's and Fund(s)' direct relationship and/or communication with any
investor; provided, however, that the Investment Manager will not be liable in
any such case to the extent that any such loss, claim, damage, liability, cost
or expense results from material breach of this Agreement, material violation of
any federal or state securities laws, or the gross negligence, willful
misconduct or misfeasance of Bear Xxxxxxx (or by any other indemnified person
under this paragraph); provided that it is agreed that the Investment Manager,
and not Bear Xxxxxxx, will be responsible for the accuracy and completeness of
any private placement memorandum, marketing materials (including, but not
limited to, the Fund Profile) and all Fund Information and Investment Manager
Information authorized by the Investment Manager for use by Bear Xxxxxxx for
which authorization has not been revoked in writing.
(b) Bear Xxxxxxx agrees to indemnify and hold the Investment Manager
(which term for purposes of this Section 11 includes the directors, partners,
controlling persons (as such term is defined under the Securities Act of 1933,
as amended), officers, employees and agents of the Investment Manager) harmless
from and against any and all losses, claims, damages, costs, liabilities or
expenses (including reasonable attorney's fees and expenses), joint or several,
to which the Investment Manager may become subject under any of the federal and
state securities laws, under any other statute, at common law or otherwise
resulting from Bear Xxxxxxx'x material breach of this Agreement, material
violation of any federal or state securities laws, gross negligence or willful
misconduct or misfeasance; provided, however, that Bear Xxxxxxx will not be
liable in any such case to the extent that any such loss, claim, damage,
liability, cost or expense results from material breach of this Agreement,
material violation of any federal or state securities laws or the gross
negligence, willful misconduct or misfeasance of the Investment Manager and/or
Fund (or by any other indemnified person under this paragraph).
(c) No indemnified person (an "Indemnified Person") seeking
indemnification, reimbursement or contribution under this Agreement will,
without the indemnifying person's written consent, settle, compromise, consent
to the entry of any judgment in or otherwise seek to terminate any pending or
threatened proceeding. Promptly after receipt by an Indemnified Person of notice
of the commencement of any action or the making of any claim, such Indemnified
Person will notify the person from which indemnification is sought (the
"Indemnifying Person") thereof. The failure to so notify the Indemnifying Person
will not relieve the Indemnifying Person from any liability which the
Indemnifying Person may have hereunder except to the extent such failure results
in prejudice to the Indemnifying Person. In case any action or claim is brought
against any Indemnified Person and it notifies the Indemnifying Person of the
commencement or making thereof, the Indemnifying Person will be entitled to
participate therein and, to the extent that the Indemnifying Person may elect by
notice to the Indemnified Person promptly after receiving the aforesaid notice
from such Indemnified Person, to assume the defense thereof, provided that the
counsel selected by the Indemnifying Person is reasonably acceptable to all
Indemnified Persons. Upon receipt of notice from the Indemnifying Person to such
Indemnified Person of the Indemnifying Person's election so to assume the
defense of such action or claim, the Indemnifying Person will not be liable to
such Indemnified Person under this indemnification provision for any legal or
other expenses subsequently incurred by the Indemnified Person in connection
with the defense thereof (other than costs of investigation or the production of
documents or witnesses) (i) unless the Indemnifying Person has failed to provide
legal counsel reasonably satisfactory to such Indemnified Person in a timely
manner; or (ii) such Indemnified Person will have reasonably concluded that the
representation for such Indemnified Person by legal counsel selected by the
Indemnifying Person would be inappropriate due to actual or potential differing
interests, in which case the Indemnifying Person will pay reasonable fees and
disbursements of one separate counsel retained by the Indemnified Person as
incurred.
-8-
(d) In any event, no party hereto shall be liable for any special,
consequential or incidental damages.
(e) This Section 11 will survive the termination of this Agreement.
12. CONFIDENTIALITY AND NON-SOLICITATIOn. Each of Bear Xxxxxxx and the
Investment Manager agrees to keep in strict confidence, and each will not
disclose the contents, terms, or provisions set forth in this Agreement,
documents relating to the business of Bear Xxxxxxx or the Investment Manager,
nor any other proprietary and non-public information of the other party
("Confidential Information"), during the term of this Agreement and thereafter;
provided, however, the foregoing will not prohibit disclosures (i) pursuant to
the exercise of the parties' responsibilities under this Agreement, (ii)
required by law or legal process or (iii) of matters which become public other
than by the actions of the disclosing party hereunder. In the event that
disclosure of Confidential Information covered by this Section is required, the
disclosing party will, to the extent legally permissible, promptly give the
other party prior written notice of the disclosure. The Investment Manager will
not use any of Bear Xxxxxxx' Confidential Information for any purpose other than
the performance of its respective obligations under this Agreement. In addition,
the Investment Manager shall not solicit any Bear Xxxxxxx Investor for any
investment in the Fund(s) or for any other investment, product or service
offered by Investment Manager or its affiliates, or for any investment advisory
or brokerage program or service other than the Program, that might make
available the Fund(s) or any other investment, product or service offered by or
similar to, those offered by the Investment Manager or its affiliates, without
the prior written consent of Bear Xxxxxxx. This Section 12 will survive the
termination of this Agreement. Bear Xxxxxxx and the Investment Manager agree
that if there is any breach of this Section that would result in immediate and
irreparable harm to the other party and for which there would be no adequate
remedy at law, the non-breaching party will be entitled to equitable relief by
way of temporary and permanent injunctions, as well as such other relief as any
court of competent jurisdiction deems appropriate.
13. MISCELLANEOUS.
(a) If any agreement, covenant, warranty or other provision of this
Agreement is invalid, illegal or incapable of being enforced by reason of any
rule of law or public policy, all other agreements, covenants, warranties, and
other provisions of this Agreement shall, nevertheless, remain in full force and
effect.
(b) No waiver by any party of a breach or non-performance of any
provision or obligation of this Agreement will be deemed to be a waiver of any
preceding or succeeding breach of the same or any other provision of this
Agreement.
(c) This Agreement may not be amended other than by a writing executed
by Bear Xxxxxxx and the Investment Manager. Neither Bear Xxxxxxx nor the
Investment Manager may assign (as defined in the Advisers Act) this Agreement
without the written consent of the other.
(d) This Agreement is the entire agreement of the parties with respect
to the subject matter hereof, supersedes all prior agreements and
understandings, oral or written, relating to the subject matter hereof, and may
not be amended, supplemented, or modified except by written instrument executed
by all parties hereto.
(e) All notices, consents, authorizations or other communications
provided for herein will be in writing and will be deemed to have been duly
given if delivered personally or by facsimile transmission, or sent by
registered or certified air mail, return receipt requested, postage prepaid, to
the party entitled to such notice by the other party to this Agreement at the
address set forth below or such other address as will be specified by notice
given as aforesaid. If to
Bear Xxxxxxx: Bear, Xxxxxxx & Co. Inc. Bear, Xxxxxxx & Co, Inc.
000 Xxxxxxx Xxxxxx 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxx Attn: Xxxxx Xxxx
Bear Xxxxxxx Advisory Bear Xxxxxxx Advisory
Services Department Services Department
Telephone: 000-000-0000 Telephone: 000-000-0000
Fascimile: 000-000-0000 Facsimile: 000-000-0000
Investment Xxxxxxxxxx Investors, LLC
Manager: 000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxxxx
Telephone: 000-000-0000
Fascimile:
-9-
(f) This Agreement may be executed in two or more counterparts, each of
which will constitute an original but all of which will constitute one and the
same document.
(g) This Agreement will be interpreted in accordance with New York law,
without regard to the choice of law principles thereof. Any dispute or
controversy, related to this Agreement, among Bear Xxxxxxx, the Investment
Manager, and/or any of their control persons, predecessors, subsidiaries,
affiliates, assigns, or employees, will be determined by binding arbitration at
a proceeding held under the auspices and in accordance with the rules,
regulations and procedures of the New York Stock Exchange, Inc. The award from
any such arbitration will be final and judgment thereon may be entered in any
court having jurisdiction and the Investment Manager and its personnel hereby
submit to the jurisdiction of any such court for the purpose of entering such
judgment. Any right to trial by jury with respect to any claim or action is
hereby waived by all parties to this Agreement. This Section 13(g) will survive
the termination of the Agreement.
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement as of the
day and year first above written.
XXXXXXXXXX INVESTORS, LLC
By: __________________________________
Name:
Title:
BEAR, XXXXXXX & CO. INC.
By: __________________________________
Name:
Title:
-10-
APPENDIX A
Xxxxxxxxxx Partners, LLC
-00-
XXXXXXXX X
OPERATIONAL FORMS
GENERIC ALTERNATIVE INVESTMENT
PRODUCT NAME BEAR XXXXXXX BEAR XXXXXXX BEAR XXXXXXX XX NAME RR# XX XXXXXX INCEPTION INITIAL PRIOR
SECURITY ACCOUNT ACCOUNT DATE INVESTMENT MONTH
IDENTIFIER NAME NUMBER (8 (PURCHASE VALUE
DIGIT ACCOUNT PRICE)
NUMBER FOLLOWED
BY A 1.
NO DASHES.
----------------------------------------------------------------------------------------------------------------------------------
ABC Fund LLC Created by Last Name, 220123451 Last Name, 123 BSNY 1/1/2001 250,000.00 250,000.00
Bear Xxxxxx First Name First Name
Prior Additions/ Gain/ Current Current Current Current Custodian
Month Withdrawals Loss Value Valuation Quantity Price Name
Date Date
----------------------------------------------------------------------------------------------------
2/28/2005 0.00 10,000.00 270,000.00 3/31/2005
GENERIC FEE TEMPLATE
PRODUCT SECURITY # CLIENT CLIENT XX # XX NAME XX XXXXXX BI CODE EFFEC. DATE
NAME NAME NUMBER (DATE INFORMATION
(8 DIGIT IS SENT)
NUMBER WITH
A 1 AT THE END.
NO DASHES
OR SPACES.
-----------------------------------------------------------------------------------------------------------------------------------
ABC Fund LLC Created by Last Name, 220123451 123 Last Name, BSNY 9P Leave 12/15/04
Bear Xxxxxxx First Name First Name this
Column
Blank
PRIOR CURRENT FEE FEE PAID TO PAYOUT % DESCRIPTION ADJ. FEE
MONTH ADJUSTED CHARGED BEAR
BALANCE BALANCE TO CLIENT XXXXXXX
-----------------------------------------------------------------------------------------------------
###### 1234569.00 300.00 60.00 GRID 11-04 Management Fee 6
APPENDIX C
Form of Legal Opinion
E-mail:xxxxxxxxx@xxxxxxx.xxx
Writer's Direct Dial: (000) 000-0000 August __, 2005
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxxxxx Partners, LLC (the "Fund")
Ladies and Gentlemen:
Reference is made to the Placement Agent Agreement dated as of August
___, 2005 (the "Placement Agent Agreement") between you, Bear, Xxxxxxx & Co.
Inc. ("Bear Xxxxxxx"), and Xxxxxxxxxx Investors, LLC (the "Investment Manager").
We have acted as counsel to the Investment Manager in connection with
the transactions contemplated by the Placement Agent Agreement. Bear Xxxxxxx has
requested that we render our opinion with respect to various matters in
connection therewith. Capitalized terms used in this opinion and not otherwise
defined herein shall have the respective meanings set forth or referred to in
the Placement Agent Agreement.
In rendering the opinions set forth herein, we have examined:
(a) The Organizational Documents (as defined in Annex A);
(b) The Placement Agent Agreement;
(c) The Fund's Registration Statement on Form N-2;
(d) The Investment Management Agreement between the Fund and the
Investment Manager;
(e) The Fund's Subscription Agreement;
(f) Such other agreements, instruments and documents, and such
questions of law as we have deemed necessary or appropriate to
enable us to render the opinions expressed below.
Additionally, we have examined originals or copies, certified to our
satisfaction, of such certificates of public officials and officers and
representatives of the Investment Manager, as the case may be, and we have made
such inquiries of officers and representatives of the Investment Manager as we
have deemed relevant or necessary, as the basis for the opinions set forth
herein.
In rendering the opinions expressed below, we have assumed that the
signatures of persons signing all documents in connection with which this
opinion is rendered are genuine (other than of those persons signing on behalf
of the Investment Manager), all documents submitted to us as originals or
duplicate originals are authentic and all documents submitted to us as copies,
whether certified or not, conform to authentic original documents.
-12-
Additionally, we have assumed and/or relied upon, the following without
any inquiry: Certificates of good standing for the Investment Manager and the
Fund dated July 7, 2005 and our opinions regarding good standing of the
Investment Manager and the Fund are made solely in reliance on said certificate,
and to the best of our knowledge after due inquiry.
Based upon the foregoing, it is our opinion that:
1. The Fund has been duly formed, is validly existing and is in good
standing
under the laws of the state of Delaware.
2. The Fund has filed a registration statement on Form N-2 with the
Securities and Exchange Commission and is a registered investment company under
the Investment Company Act of 1940, as amended (the "Company Act").
3. The Fund has made all appropriate state securities law filings that
are required to be made as of the date hereof.
4. The Investment Manager is a Delaware limited liability company duly
formed, validly existing and in good standing under the laws of the State of
Delaware.
5. The Investment Manager has all necessary power and authority to
execute, deliver and perform its obligations under Placement Agent Agreement
dated as of the date hereof by and between the Investment Manager and Bear
Xxxxxxx.
6. The execution and delivery of the Placement Agent Agreement by the
Investment Manager and the performance of its obligations thereunder have been
duly and validly authorized by all necessary actions of the Investment Manager
and the Fund and constitute the legal, valid and binding obligation of the
Investment Manager, enforceable against the Investment Manager in accordance
with its terms.
7. The execution and delivery of the Fund's Limited Liability Company
Agreement by an officer of the Fund and the performance of its obligations
thereunder have been duly and validly authorized by all necessary actions of the
Fund.
8. The execution and delivery of the Investment Management Agreement by
the Investment Manager and by an officer of the Fund and the performance of
their obligations thereunder have been duly and validly authorized by all
necessary actions of the Investment Manager and the Fund and constitute their
legal, valid and binding obligations in accordance with its terms.
9. The execution, delivery and performance of the Placement Agent
Agreement: (a) will not violate any New York or United States federal law or
regulation, the Delaware Limited Liability Company Act or the Company Act or any
order or decree binding on the Investment Manager or the Fund, known to us, of
any court or governmental instrumentality; (b) is permissible in accordance with
the terms of, and will not conflict with or result in the breach or termination
of, or constitute a default under, the Fund's Organizational Documents (as
defined in Annex A), as applicable; (c) will not conflict with or result in the
breach or termination of, or constitute a default under, any indenture,
mortgage, deed of trust, lease, agreement or other instrument known to us to
which the Investment Manager or the Fund is a party or by which the Investment
Manager or the Fund, or any of their property is bound; (d) will not result in
the creation or the imposition of any lien upon any of the property of the
Investment Manager or the Fund pursuant to any such agreement; and (e) will not
require the consent, approval, waiver, license, authorization or order of any
court or governmental agency or body other than any such required consent,
approval, waiver, license, authorization or order that has previously been
obtained by the Investment Manager or the Fund.
-13-
10. To our knowledge, there is no action, suit or proceeding pending or
threatened against or otherwise affecting either the Investment Manager or the
Fund before any court, arbitrator or governmental department, commission, board,
bureau, agency or instrumentality.
11. To our knowledge, the offer and sale of the Fund's Interests as
conducted to date are exempt from the registration requirements of the
Securities Act of 1933, as amended.
The opinions as expressed herein are subject to the following
qualifications:
(a) We are members of the Bar of the State of New York. We are not
admitted to practice law in any other jurisdiction but are familiar with certain
laws of the State of Delaware and, therefore, express no opinion with respect to
the laws of any jurisdiction other than the State of New York, the General
Corporation Law of the State of Delaware, the Delaware Limited Liability Company
Act and the Federal laws of the United States.
(b) We express no opinion as to the enforceability of any rights to
contribution or indemnification provided for in the Placement Agent Agreement to
the extent any such rights are violative of the public policy underlying any
law, rule or regulation (including, without limitation, any Federal or state
securities law, rule or regulation).
(c) We express no opinion as to any provision of the Placement Agent
Agreement to the extent it authorizes or permits any Person, other than the
party to the Placement Agent Agreement to whom an obligation is owed, to set-off
or apply any deposit, property or indebtedness in respect of such obligation.
(d) We express no opinion as to any provision of the Placement Agent
Agreement intended to establish any standard as the measure of the performance
by any party thereto of such party's obligations of good faith, diligence, fair
dealing, reasonableness or care.
(e) We express no opinion as to the enforceability of any provision of
the Placement Agent Agreement which purports to provide for a waiver by the
Investment Manager or the Fund of any immunity or right which may be available
to Bear Xxxxxxx.
(f) We express no opinion as to the effect on the enforceability of the
Placement Agent Agreement providing that rights or remedies are not exclusive,
that every right or remedy is cumulative, or that the election of a particular
remedy or remedies does not preclude recourse to one or more other remedies.
(g) We express no opinion of the effect on the enforceability of the
Placement Agent Agreement of any provision authorizing or permitting the
recovery of attorneys' fees in excess of reasonable attorneys' fees.
(h) The enforceability of certain rights and remedies set forth in the
Placement Agent Agreement may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other laws of
general applicability relating to or affecting creditors' rights or the
enforcement of security interests and liens, and (ii) general principles of
equity (regardless of whether enforceability is considered in a proceeding in
equity or at law), including, without limitation, possible unavailability of
specific performance, injunctive relief or other equitable remedies and an
implied covenant of good faith and fair dealing.
(i) The phrase "to our knowledge" means to our actual knowledge,
without independent investigation.
-14-
This letter constitutes our opinion only and shall not be deemed to be
a guarantee of the matters set forth herein. This opinion is given as of the
date hereof, and we undertake no obligation, and hereby disclaim any obligation,
to update or supplement this opinion in respect to subsequent changes in the law
or future events affecting the transactions contemplated by the Placement Agent
Agreement or resulting from matters that may hereinafter be brought to our
attention. We do not give any opinion except as set forth above. This opinion is
being furnished only to you, and may not be furnished to, used, circulated,
quoted or relied upon or otherwise referred to any governmental agency, entity
or person for any purpose whatsoever without our express prior written consent.
Very truly yours,
XXXXXXXXXX XXXXXXX
SYRACUSE & HIRSCHTRITT LLP
-15-
EXHIBIT I
BEAR XXXXXXX DISCLOSURE STATEMENT
Xxxxxxxxxx Investors, LLC (the "Investment Manager"), a Delaware
limited liability company, is an investment adviser registered with the
Securities and Exchange Commission under the Investment Advisers Act of 1940, as
amended. The Investment Manager has engaged the services of Bear, Xxxxxxx & Co.
Inc. ("Bear Xxxxxxx"), a registered broker-dealer, to introduce prospective
investors to acquire interests (each an "Interest") in Xxxxxxxxxx Partners, LLC
(the "Fund"). The Investment Manager acts as investment manager to the Fund.
The Investment Manager and Bear Xxxxxxx are not affiliated and Bear
Xxxxxxx performs its services as solicitor and placement agent pursuant to a
written agreement between the Investment Manager and Bear Xxxxxxx.
Bear Xxxxxxx Securities Corp. ("BSSC"), a subsidiary of Bear Xxxxxxx,
may provide prime broker services to underlying hedge funds (the "Investment
Funds") used by the Fund which may include execution, lending, custody and other
services for which BSSC earns commissions, fees or other compensation. In
addition, Bear Xxxxxxx and its affiliates, may also receive, as broker,
commissions, fees or other additional compensation from the Investment Funds in
connection with the execution of transactions directed by the Investment Funds
through Bear Xxxxxxx. Moreover, through these relationships Bear Xxxxxxx and its
affiliates may obtain information about Investment Funds and/or its accounts.
Bear Xxxxxxx has no obligation to disclose to you any information obtained
through these relationships. Bear Xxxxxxx may also take actions in the course of
those relationships that adversely affect the Fund and its clients, including
investors in the Fund or other funds advised by the Investment Manager.
For each person who is referred by Bear Xxxxxxx and who acquires an
Interest, the Investment Manager has agreed to pay Bear Xxxxxxx an annualized
amount equal to 0.60% multiplied by the aggregate market value of each
investor's investments in the Fund who invest in the Fund following the
solicitation and placement agent activities of Bear Xxxxxxx (including you)
(collectively, "Investors").
This compensation to Bear Xxxxxxx does not in any way affect any
management or performance fee to which you would be subject in the event that
you acquired an Interest without the solicitation of Bear Xxxxxxx.
Bear Xxxxxxx has in the last ten years been the subject of SEC Orders
Making Findings and Imposing Sanctions under the Securities Exchange Act of 1934
(the "Exchange Act") as follows: (1) On January 11, 1999, the SEC found that
Bear Xxxxxxx violated various trading and other requirements under the Exchange
Act in connection with its market-making activities on the NASDAQ Stock Market.
Bear Xxxxxxx settled this case with the SEC, along with a number of other
settling firms, without admitting or denying the SEC findings; (2) On April 28,
2003, the SEC and other state and self-regulators, found Bear Xxxxxxx violated
Federal securities laws, in connection with alleged research analyst conflicts
of interest. Bear Xxxxxxx, along with many leading securities firms, settled
this case without admitting or denying any allegations, findings or conclusions.
The settlement requires Bear Xxxxxxx to pay monetary penalties and make other
payments and to adopt various additional policies, systems, procedures and other
safeguards to ensure further the integrity of Bear Xxxxxxx'x investment
research. Bear Xxxxxxx also consented to a voluntary initiative imposing
restrictions on the allocation of shares in initial public offerings to
executives and directors of public companies.
-16-
CLIENT ACKNOWLEDGEMENT
By signing below, I understand and acknowledge the following:
1. An investment in any fund of hedge funds is speculative and involves
a high degree of risk, which each investor must carefully consider. Returns
generated from an investment in a fund of hedge funds may not adequately
compensate investors for the business and financial risks assumed. While funds
of hedge funds are subject to market risks common to other types of investments,
including market volatility, hedge funds employ certain trading techniques, such
as the use of leveraging and other speculative investment practices that may
increase the risk of investment loss. Other risks associated with fund of hedge
funds investments include, but are not limited to, the fact that Investment
Funds:
o May generate substantial losses as well as profits and may suffer
an entire loss of capital; performance may be volatile (which
volatility can be magnified through the use of derivative
instruments that include elements of leverage);
o Investment-Fund strategies may lack diversification and be highly
concentrated in certain types of securities, economic and/or
industrial sectors and/or specific securities;
o May effect a substantial portion of its trades on foreign
exchanges, which may trigger risks related to settlement of
transactions, currency fluctuation, liquidity, counterparty and
stock registration risk;
o May face risks related to international investing, including
political, economic and currency risk and require government
approvals for the repatriation of investment income, capital or
sales proceeds;
o Can be highly illiquid, may use leverage to enhance returns or
short selling (which has the potential for unlimited risk to the
investment); derivative instruments (such as call options, put
options, futures contracts and structured notes) may be used for
speculative and hedging strategies; Investment Funds may involve
complex tax strategies;
o May invest in a variety of other securities, including, among
others, equity securities (including large-, mid-, small- and
micro-cap), fixed income securities (including, but not limited
to, distressed and non-investment grade debt), mortgage-backed
securities, repurchase and reverse repurchase securities and
restricted and illiquid securities. Investment Funds will be
subject to specific risks related to such securities and
strategies, including, but not limited to, changing economic
conditions and fundamental characteristics, interest rate, credit
and market risk, counterparty risk, prepayment risk, bankruptcy
and restructuring of issuers, lack of liquidity and pricing
risks;
o May have a limited operating history and risk of loss due to the
loss of a key individual;
o Are not subject to the same regulatory requirements as mutual
funds;
o May not be required to provide periodic pricing or valuation
information to investors; therefore transparency at the
Investment-Fund level may be limited;
o May encounter delays in distributing important tax information;
an investor's tax liability (including the Fund) may exceed cash
distributions;
o May not have a secondary market for an investor's interest in the
Investment-Fund and none may be expected to develop;
-17-
o May have restrictions on redemptions that do not correspond to
Fund restrictions on redemptions, which may impact the Fund's
ability to effect redemptions;
o Fees may offset Investment-Fund trading profits; funds of hedge
funds are subject to fees at the Fund level and the Investment
Fund level;
o May have potential conflict of interests, including but not
limited to, those related trading securities as principal for
their own account and those related to allocations of securities
among multiple accounts/funds managed by the Investment-Fund
manager.
2. The Fund may have the same risks as described above. The Fund's
portfolio may lack diversification and be highly concentrated in certain types
of Investment Funds and Investment Funds that take contrary positions or
concentrations. The Fund also may have limited transparency into the operations
of Investment Funds and little or no means of independently verifying valuations
provided by Investment Funds.
The above discussions of the various risks associated with the Fund and the
Interests are not, and are not intended to be, a complete enumeration or
explanation of the risks involved in an investment in the Fund. A prospective
investor should read the Fund's Private Placement Memorandum including, but not
limited to, the Risk Factors and Conflicts of Interests sections and
Subscription Documents and Operating Agreement (collectively, "Offering
Documents"), carefully prior to making any investments.
3. I have received and reviewed a copy of Part II of the Investment Manager's
Form ADV;
4. I have received and reviewed a copy of Bear Xxxxxxx Disclosure Statement
dated __________.
______________________________ __________________________
Name: Date:
______________________________ __________________________
Name: Date:
-18-
