ADMINISTRATION, FUND ACCOUNTING AND RECORDKEEPING AGREEMENT
THIS ADMINISTRATION, FUND ACCOUNTING
AND RECORDKEEPING AGREEMENT (the “Agreement”) is made as of this ___ day
of ____________, 2010, by and between Persimmon Growth Partners Investor Fund, a
Delaware statutory trust (the “Fund”), and X.X. Xxxxx & Co., Inc., a Utah
corporation (the “Administrator”).
WHEREAS, the Fund is
authorized to offer and sell Interests (as defined below) in the Fund in
reliance on exemptions provided in the 1933 Act, the 1940 Act and state
securities laws for transactions not involving any public offering;
and
WHEREAS, the Fund and
Administrator desire to enter into an agreement pursuant to which Administrator
shall provide Services to the Fund.
NOW, THEREFORE, in
consideration of the mutual promises and agreements herein contained and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto, intending to be legally bound, do hereby agree as
follows:
1. Definitions In
addition to any terms defined in the body of this Agreement, the following
capitalized terms shall have the meanings set forth hereinafter whenever they
appear in this Agreement:
“1933
Act” shall mean
the Securities Act of 1933, as amended.
“1940
Act” shall mean
the Investment Company Act of 1940, as amended.
“Authorized
Person” shall
mean any individual who is authorized to provide Administrator with Instructions
and requests on behalf of the Fund, whose name shall be certified to
Administrator from time to time pursuant to Section 3(b) of this
Agreement. Any officer of the Fund shall be considered an Authorized
Person (unless such authority is limited in a writing from the Fund and received
by Administrator) and has the authority to appoint additional Authorized
Persons, to limit or revoke the authority of any previously designated
Authorized Person, and to certify to Administrator the names of the Authorized
Persons from time to time.
“Board” shall mean the Board of
Trustees of the Fund.
“Commission” shall mean the U.S.
Securities and Exchange Commission.
“Instructions” shall mean an oral
communication from an Authorized Person or a written communication signed by an
Authorized Person and actually received by
Administrator. Instructions shall include manually executed
originals, telefacsimile transmissions of manually executed originals or
electronic communications.
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“Interests” shall mean shares of
beneficial interest of the Fund representing interests in a separate portfolio
of securities and other assets.
“Investment
Adviser” shall
mean the investment adviser or investment advisers to the Fund and includes all
sub-advisers or persons performing similar services.
“Investor” shall mean a record owner of
Interests.
“Offering
Documents” shall
mean the Fund’s Confidential Private Placement Memorandum dated July 1, 2010,
and any successor thereto, and any other documents required to be provided to
Investors or potential Investors.
“Operating
Agreement” shall
mean the Fund’s Declaration of Trust and By-Laws.
“Services” shall mean the
administration, fund accounting and recordkeeping services described on Schedule
A hereto and such additional services as may be agreed to by the parties from
time to time and set forth in an amendment to Schedule A.
2. Appointment and
Services
(a) The
Fund hereby appoints Administrator as administrator, fund accountant and
recordkeeper of the Fund and hereby authorizes Administrator to provide Services
during the term of this Agreement. Subject to the direction and control of the
Fund’s Board and its current and prior agents and service providers,
Administrator will provide the Services in accordance with the terms of this
Agreement. Notwithstanding anything
herein to the contrary, Administrator shall not be required to provide any
Services or information that it believes, in its sole discretion, to represent
dishonest, unethical or illegal activity. In no event shall
Administrator provide any investment advice or recommendations to any party in
connection with its Services hereunder.
(b) Administrator
may from time to time, in its discretion, appoint one or more other parties to
carry out some or all of its duties under this Agreement, provided that
Administrator shall remain responsible to the Fund for all such delegated
responsibilities in accordance with the terms and conditions of this Agreement,
in the same manner and to the same extent as if Administrator were providing
such Services itself.
(c) Administrator’s duties
shall be confined to those expressly set forth herein, and no implied duties are
assumed by or may be asserted against Administrator
hereunder. The Services do not include correcting, verifying
or addressing any prior actions or inactions of the Fund, the Board, or by any
other current or prior service provider. To the extent that
Administrator agrees to take such actions, those actions shall be deemed part of
the Services.
(d) Administrator
shall not be responsible for the payment of any fees or taxes required to be
paid by the Fund in connection with the issuance of any Interests in accordance
with this Agreement.
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(e) It is understood that in
determining security valuations, Administrator employs one or more pricing
services, to determine valuations of portfolio securities for purposes of
calculating net asset values of the Fund. The Administrator shall
price the securities and other holdings of the Fund for which market
quotations or prices are available by the use of such pricing service(s)
and as provided in the Fund’s prospectus or Offering Documents. For
those securities where prices are not provided by the pricing service(s)
utilized by Administrator, the
Board shall approve, in good faith, the method for determining the fair value of
the securities. The Board shall determine or obtain the valuation of
the securities in accordance with those procedures and shall deliver to Administrator the
resulting prices for use in its calculation of net asset values. When
security valuations are provided by Administrator or pricing services(s), the
following provisions will also apply:
(i) Valued
securities are typically complicated financial instruments. There are
many methodologies (including computer-based analytical modeling and individual
security valuations) available to generate approximations of the market value of
such securities and there is significant professional disagreement about which
method is best. No evaluation method, including those used by
Administrator and the pricing services(s), may consistently generate
approximations that correspond to actual “Traded” prices of the
securities.
(ii) Methodologies
used to provide the pricing portion of certain data may rely on valuations,
however, the Fund acknowledges that there may be errors or defects in the
software, databases, or methodologies generating the valuations that may cause
resultant valuations to be inappropriate for use in certain
applications.
(iii) The
Fund assumes all responsibility for edit checking, external verification of
valuations, and ultimately the appropriateness of using data containing
valuations, regardless of any efforts made by Administrator and the pricing
service(s) in this regard.
(f) Any
Instruction that affects accounting practices and procedures under this
Agreement shall be effective upon written receipt of notice and acceptance by
Administrator.
(g) Nothing
in this Agreement shall be deemed to appoint Administrator and its officers,
directors and employees as the Fund’s attorney, form an attorney-client
relationship or require the provision of legal advice. The Fund
acknowledges that Administrator’s in-house attorneys exclusively represent
Administrator and rely on the Fund’s legal counsel to review all services
provided by Administrator’s in-house attorneys and to provide independent
judgment on the Fund’s behalf. Because no attorney-client
relationship exists between Administrator’s in-house attorneys and the Fund, any
information provided to the Administrator’s in-house attorneys may not be
privileged and may be subject to compulsory disclosure under certain
circumstances, notwithstanding the provisions of Section
5. Administrator represents that it will maintain the confidentiality
of information disclosed to its in-house attorneys on a best efforts
basis.
(h) Administrator
hereby agrees that all records which it maintains for the Fund pursuant to its
duties hereunder are the property of the Fund and further agrees to surrender
promptly to the Fund any of such records upon the Board’s request.
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(i) Anti-Money Laundering (“AML”)
Services
(i) Background. In order to
assist its clients with any obligations they may have under the USA PATRIOT Act,
the Bank Secrecy Act of 1970, the customer identification program rules jointly
adopted by the Commission and the U.S. Treasury Department and other applicable
regulations adopted thereunder (the “AML Laws”), Administrator offers various
tools designed to assist in the verification of persons opening accounts with
the Fund and determine whether such persons appear on any list of known or
suspected terrorists or terrorist organizations. Administrator will, at
the written or electronic direction of the Board, assist the Fund with its
monitoring obligations under the USA PATRIOT Act by (1) at such time as directed
by the Board, rejecting subscription agreements that are not accompanied by
required identifying information; (2) providing an initial check of identifying
information against the database (or any successor thereto) licensed by the
Administrator; (3) providing an initial check of persons submitting subscription
agreements against the Office of Foreign Asset Controls (“OFAC”) list; (4) upon
consultation with the Board, filing a suspicious activity report (“SAR”) with
the appropriate authorities; (5) permitting federal regulators access to such
information and records maintained by the Administrator relating to the
Administrator’s implementation of the Fund’s monitoring obligations, as they may
request, and (6) permitting such federal regulators to inspect the
Administrator’s implementation of such monitoring obligations on behalf of the
Fund.
(ii) In
connection with the AML services described above, Administrator may encounter
Investor activity that would require it to file a SAR with the Department of the
Treasury’s Financial Crimes Enforcement Network (“FinCEN”), as required by 31
CFR 103.15(a)(2) (“Suspicious Activity”). Nothing in this Agreement shall
prevent Administrator from making a determination that it has an obligation
under the USA PATRIOT Act to file a SAR relating to any Suspicious Activity, and
from making such filing independent of the other party
hereto. Neither Administrator nor the Fund shall disclose any SAR
filed or the information included in a SAR to any third party other than
affiliates of Administrator or the Fund on a need to know basis and in
accordance with applicable law, rule, regulation and interpretation, that would
disclose that a SAR has been filed.
3. Representations and
Deliveries
(a) The
Fund shall deliver or cause the following documents to be delivered to
Administrator:
(1) A
true and complete copy of the Operating Agreement and all amendments
thereto;
(2) Copies
of the Fund’s Offering Documents, as of the date of this Agreement, together
with any subscription documents;
(3) A
certificate containing the names of the initial Authorized Persons in a form
acceptable to Administrator. Any officer of the Fund shall be
considered an Authorized Person (unless such authority is limited in a writing
from the Fund and received by Administrator) and has the authority to appoint
additional Authorized Persons, to limit or revoke the authority of any
previously designated Authorized Person, and to certify to Administrator the
names of the Authorized Persons from time to time.
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(4) All
Investor account records in a format acceptable to Administrator, in Ogden, Utah
and at the Fund’s expense.
(5) All
other documents, records and information that Administrator may reasonably
request in order for Administrator to perform the Services
hereunder.
(b) The
Fund represents and warrants to Administrator that:
(1) It
is a statutory trust duly organized and existing under the laws of the State of
Delaware; it is empowered under applicable laws and by its Operating
Agreement to enter into and perform this Agreement; and all requisite
legal proceedings have been taken to authorize it to enter into and perform this
Agreement, including any resolutions necessary to appoint Administrator and
authorize the execution of this Agreement on behalf of the Fund.
(2) Any
officer of the Fund has the authority to appoint additional Authorized Persons,
to limit or revoke the authority of any previously designated Authorized Person,
and to certify to Administrator the names of such Authorized
Persons.
(3) The
Fund is authorized to offer and sell Interests in the Fund in reliance on
exemptions provided in the 1933 Act, the 1940 Act and state securities laws for
transactions not involving any public offering.
(4) The
person signing this Agreement represents and warrants he/she is duly authorized
to execute this Agreement on behalf of the Fund.
(5) It
is conducting its business in compliance in all material respects with any
applicable laws and regulations, both state and federal, and has obtained all
regulatory approvals necessary to carry on its business as now conducted; there
is no statute, rule regulation, order or judgment binding on it and no provision
of its Operating Agreement or any contract binding it or affecting its property
which would prohibit its execution or performance of this
Agreement.
(c) During
the term of this Agreement the Fund shall have the ongoing obligation to provide
Administrator with the following documents as soon as they become effective: (i)
certified copies of all amendments to its Operating Agreement made after the
date of this Agreement; and, (ii) a copy of the Fund’s currently effective
Offering Documents. For purposes of this Agreement, Administrator
shall not be deemed to have notice of any information contained in any such
Offering Document until a reasonable time after it is actually received by
Administrator.
(d) The Board
and Investment Adviser have and retain primary responsibility for all compliance
matters relating to the Fund, including but not limited to compliance with all
applicable provisions of the 1934 Act, the 1940 Act, state securities laws, the
Internal Revenue Code of 1986, as amended, the USA PATRIOT Act of 2001
(including checking persons submitting Subscription Agreements against the OFAC
list if Administrator is not directed to do so), the Xxxxxxxx-Xxxxx Act of 2002
and the policies and limitations of the Fund relating to the portfolio
investments as set forth in the Offering Documents. Administrator’s
Services hereunder shall not relieve the Board and the Investment Adviser of
their primary day-to-day responsibility for assuring such
compliance. Notwithstanding the
foregoing, Administrator will be responsible for its own compliance with such
statutes insofar as such statutes are applicable to the Services it has agreed
to provide hereunder, and will promptly notify the Fund if it becomes aware of
any material non-compliance which relates to the Fund.
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(e) The
Fund agrees to take or cause to be taken all requisite steps to comply with any
applicable Blue Sky laws in all states in which the Interests shall at the time
be offered for sale. If the Fund receives notice of any stop order or
other proceeding in any such state affecting the sale of Interests, or of any
stop order or other proceeding under the federal securities laws affecting the
sale of Interests, the Fund will give prompt notice thereof to
Administrator.
(f) The
Fund agrees that it shall advise Administrator in writing at least thirty (30)
days prior to affecting any change to its Offering Documents or Operating
Agreement or adopt any policies that would increase or alter the duties and
obligations of Administrator hereunder, and shall proceed with such change only
if it shall have received the written consent of Administrator
thereto.
(g) Fund Instructions
(i) The
Board of the Fund shall cause the Investment Adviser, prime broker and/or
custodian, legal counsel, independent accountants and other service providers
and agents, past or present, for the Fund to cooperate with Administrator and to
provide Administrator with such information, documents and communications as
necessary and/or appropriate or as requested by Administrator, to enable
Administrator to perform the Services. In connection with the
performance of the Services, Administrator shall (without investigation or
verification) be entitled, and is hereby instructed to, rely upon any and all
Instructions, communications, information or documents provided to Administrator
by an officer or representative of the Board or the Fund or by any of the
aforementioned persons. Administrator shall be entitled to rely on
any document that it reasonably believes to be genuine and to have been signed
or presented by the proper party. Fees charged by such persons shall
be an expense of the Fund. Administrator
shall not be held to have notice of any change of authority of any Authorized
Person, agent, representative or employee of the Board, the Fund, Investment
Adviser or service provider until receipt of written notice thereof from the
Fund.
(ii) The
Fund shall provide Administrator with an updated certificate evidencing the
appointment, removal or change of authority of any Authorized Person, it being
understood Administrator shall not be held to have notice of any change in the
authority of any Authorized Person until receipt of written notice thereof from
the Fund.
(iii) Administrator,
its officers, agents or employees shall accept Instructions given to them by any
person representing or acting on behalf of the Fund only if such representative
is an Authorized Person. The Fund agrees that when oral Instructions
are given, it shall, upon the request of Administrator, confirm such
Instructions in writing.
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(iv) At
any time, Administrator may request Instructions from the Fund with respect to
any matter arising in connection with this Agreement. If such
Instructions are not received within a reasonable time, Administrator may seek
advice from legal counsel for the Fund at the expense of the Fund, or its own
legal counsel at its own expense, and it shall not be liable for any action
taken or not taken by it in good faith in accordance with such instructions or
in accordance with advice of counsel.
(h) Administrator
represents and warrants to the Fund that:
(i) It
is a corporation duly organized and existing under the laws of the State of
Utah; it is empowered under applicable law and by its Articles of Incorporation
and By-laws to enter into and perform this Agreement; and all requisite
proceedings have been taken to authorize it to enter into and perform this
Agreement.
(ii) It
is conducting its business in compliance in all material respects with all
applicable laws and regulations, both state and federal, and has obtained all
regulatory approvals necessary to carry on its business as now conducted; there
is no statute, rule regulation, order or judgment binding on it and no provision
of its operating documents or any contract binding it or affecting its property
which would prohibit its execution or performance of this
Agreement.
(iii) Administrator
will provide office
space, facilities, equipment and personnel sufficient to carry out its services
hereunder and Administrator shall maintain a disaster recovery and
business continuity plan and adequate and reliable computer and other equipment
necessary and appropriate to carry out its obligations under this
Agreement. Upon the Fund’s reasonable request, Administrator shall
provide supplemental information concerning the aspects of its disaster recovery
and business continuity plan that are relevant to the Services.
(iv) Administrator
shall exercise reasonable care in the performance of the Services.
4. Fees and
Expenses
(a) As
compensation for the performance of the Services, the Fund agrees to pay
Administrator the fees set forth on Schedule B hereto. Fees shall be adjusted in
accordance with Schedule B or as otherwise agreed to by the parties from time to
time. Fees shall be
earned and paid monthly based on net assets at the beginning of the month in an
amount equal to at least 1/12th of the applicable annual
fee. The parties may amend this Agreement to include fees for
any additional services, or enhancements to current Services, as mutually agreed
upon. The Fund agrees to pay Administrator’s then current rate for
Services added to, or for any enhancements to existing Services set forth on,
Schedule A after the execution of this Agreement. In addition, to the extent
that Administrator corrects, verifies or addresses any prior actions or
inactions by the Fund, the Board, or by any prior service provider,
Administrator shall be entitled to additional fees as provided in Schedule
B. In the event of any disagreement between this
Agreement and Schedule B, the terms of Schedule B shall control.
(b) For
the purpose of determining fees payable to Administrator, net asset value shall
be computed in accordance with the Fund’s Operating Agreement, the Offering
Documents and Instructions. Upon any termination of this Agreement
before the end of any month, the fee for such part of a month shall be pro-rated
according to the proportion which such period bears to the full monthly period
and shall be payable upon the date of termination of this
Agreement. Should this Agreement be terminated or the Fund be
liquidated, merged with or acquired by another fund, any accrued fees shall be
immediately payable.
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(c) Administrator
will bear all expenses incurred by it in connection with its performance of
Services, except as otherwise provided herein. Administrator shall
not be required to pay or finance any costs and expenses incurred in the
operation of the Fund, including, but not limited to: taxes; interest; brokerage
fees and commissions; salaries, fees and expenses of Authorized Persons; Commission fees and
state Blue Sky fees; advisory fees; charges of custodians, and other service
providers; security pricing services; insurance premiums; outside auditing and
legal expenses; costs of organization and maintenance of trust existence; taxes
and fees payable to federal, state and other governmental agencies; preparation,
typesetting, printing, proofing and mailing of Offering Documents, notices,
forms and applications and proxy materials for regulatory purposes and for
distribution to current Investors;
preparation, typesetting, printing, proofing and mailing and other costs of
Investor
reports; expenses in connection with the electronic transmission of documents
and information including electronic filings with the Commission and the states;
research and statistical data services; expenses incidental to holding meetings
of the Fund’s Investors and other
Fund personnel; fees and expenses associated with internet, e-mail and other
related activities; and extraordinary expenses.
(d) The
Fund agrees to pay all amounts due hereunder within thirty (30) days of receipt
of each invoice (the “Due Date”). Except as provided in Schedule B,
Administrator shall xxxx Service fees monthly.
(e) The
Fund is aware that its failure to remit to Administrator all amounts due on or
before the Due Date will cause Administrator to incur costs not contemplated by
this Agreement, including, but not limited to carrying, processing and
accounting charges. Accordingly, in the event that Administrator does
not receive any amounts due hereunder by the Due Date, the Fund agrees to pay a
late charge on the overdue amount equal to one and one-half percent (1.5%) per
month or the maximum amount permitted by law, whichever is less. In
addition, the Fund shall pay Administrator’s reasonable attorney’s fees and
court costs if any amounts due Administrator are collected by or through an
attorney. The parties hereby agree that such late charge represents a
fair and reasonable computation of the costs incurred by reason of the Fund’s
late payment. Acceptance of such late charge shall in no event
constitute a waiver by Administrator of the Fund’s default or prevent
Administrator from exercising any other rights and remedies available to
it.
(f) In
the event that any charges are disputed, the Fund shall, on or before the Due
Date, pay all undisputed amounts due hereunder and notify the Administrator in
writing of any disputed charges which it is disputing in good
faith. Payment for such disputed charges shall be due on or before
the close of the fifth business day after the day on which Administrator
provides documentation which an objective observer would agree reasonably
supports any disputed charges (the “Revised Due Date”). Late charges
shall not begin to accrue as to charges disputed in good faith until the first
day after the Revised Due Date.
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(g) The
Fund acknowledges that the fees charged by Administrator under this Agreement
reflect the allocation of risk between the parties, including the exclusion of
remedies and limitations of liability in Section 6. Modifying the
allocation of risk from what is stated herein would affect the fees that
Administrator charges. Accordingly, in consideration of those fees,
the Fund agrees to the stated allocation of risk.
5. Confidential
Information
(a) The
Administrator agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Fund all records relative
to the Fund’s Investors, not to use such records and information for any purpose
other than performance of the Services, and not to disclose such information
except where the Administrator may be exposed to civil or criminal proceedings
for failure to comply, when requested to divulge such information by duly
constituted authorities or court process, when subject to governmental or
regulatory audit or investigation, or when so requested by the Fund. In case of
any requests or demands for inspection of the records of the Fund, the
Administrator will endeavor to notify the Board promptly and to secure
instructions from a representative of the Board as to such inspection, unless
prohibited by law from making such notification. Records and information which
have become known to the public through no wrongful act of the Administrator or
any of its employees, agents or representatives, and information which was
already in the possession of the Administrator prior to the date hereof, shall
not be subject to this Section.
(b) The
Fund agrees that the terms of this Agreement shall be kept confidential, and
shall not be publicized or in any way disclosed to third parties other than the
Fund’s Board.
6. Limitation
of Liability In addition to the limitation of liability
contained in Section 3 of this Agreement:
(a) Administrator
shall not be liable for any error of judgment or mistake of law or for any loss
suffered by the Fund in connection with the matters to which this Agreement
relates, except for a loss resulting from the Administrator’s willful
misfeasance, bad faith or gross negligence in the performance of its duties or
from reckless disregard by it of its obligations and duties under this
Agreement. Furthermore, Administrator shall not be liable for: (i)
any action taken or omitted to be taken in accordance with or in reliance upon
written or oral instructions, advice, data, documents or information (without
investigation or verification) received by Administrator from or on behalf of
the Board or an officer or representative of the Fund, or from a representative
of any of the parties referenced in Section 3; (ii) its reliance on
the security valuations without investigation or verification provided by
pricing service(s), the Board or other representatives of the Fund; (iii) any
liability arising from the offer or sale of any Interest by the Fund in reliance
on exemptions from registration under the 1933 Act, the 1940 Act and the
applicable securities laws of each state and territory in which the Fund intends
to offer and sell Interests; or (iv) any action taken or omission by the Fund,
the Board, Investment Adviser or any past or current service provider (not
including Administrator).
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(b) Notwithstanding
anything herein to the contrary, Administrator will be excused from its
obligation to perform any Service or obligation required of it hereunder for the
duration that such performance is prevented by events beyond its reasonable
control and shall not be liable for any default, damage, loss of data or
documents, errors, delay or any other loss whatsoever caused
thereby. Administrator will, however, take all reasonable steps to
minimize service interruptions for any period that such interruption continues
beyond its reasonable control.
(c) In
no event and under no circumstances shall the Indemnified Parties (as defined
below) be liable to anyone, including, without limitation, the other party,
under any theory of tort, contract, strict liability or other legal or equitable
theory for lost profits, exemplary, punitive, special, indirect or consequential
damages for any act or failure to act under any provision of this Agreement
regardless of whether such damages were foreseeable and even if advised of the
possibility thereof.
(d) Notwithstanding
any other provision of this Agreement, Administrator shall have no duty or
obligation under this Agreement to inquire into, and shall not be liable
for:
(i) the
legality of the issue or sale of any Interests, the sufficiency of the amount to
be received therefor, or the authority of the Fund, as the case may be, to
request such sale or issuance;
(ii) the
legality of a subscription or tender of any Interests, the propriety of the
amount to be paid therefor, or the authority of the Fund, as the case may be, to
request such subscription or tender;
(iii) the
legality of the declaration of any dividend by the Fund, or the legality of the
issue of any Interests in payment of any dividend;
(iv) the
legality of any recapitalization or readjustment of Interests;
(v) Administrator’s
acting upon telephone or electronic instructions relating to the subscription or
tender of Interests received by Administrator in accordance with procedures
established by Administrator and the Fund; or
(vi) the
offer or sale of Interests in violation of any requirement under the securities
laws or regulations of any state that such Interests be qualified for sale in
such state or in violation of any stop order or determination or ruling by any
state with respect to the offer or sale of such Interests in such
state.
(e) The
obligations of the parties under Section 6 shall indefinitely survive the
termination of this Agreement.
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7. Indemnification
(a) The
Fund agrees to indemnify and hold harmless Administrator, its employees, agents,
officers, directors, shareholders, affiliates and nominees (collectively,
“Indemnified Parties”) from and against any and all claims, demands, actions and
suits, and any and all judgments, liabilities, losses, damages, costs, charges,
reasonable counsel fees and other expenses of every nature and character which
may be asserted against or incurred by any Indemnified Party or for which any
Indemnified Party may be held liable (a “Claim”), arising out of or in any way
relating to any of the following:
(i) any
action or omission of Administrator except to the extent a Claim resulted from
Administrator’s willful misfeasance, bad faith, negligence in the performance of
its duties or from reckless disregard by it of its obligations and duties
hereunder;
(ii) Administrator’s
reliance on, implementation of, or use of Instructions, communications, data,
documents or information (without investigation or verification) received by
Administrator from an officer or representative of the Fund, the Board,
Investment Adviser or any past or current service provider (not including
Administrator);
(iii) any
action taken, or omission by the Fund, the Board, Investment Adviser or any past
or current service provider (not including Administrator);
(iv)
the Fund’s refusal or failure to comply with the terms of this Agreement,
or any Claim that arises out of the Fund’s gross negligence or misconduct or
breach of any representation or warranty of the Fund made herein;
(v) the
legality of the issue or sale of any Interests, the sufficiency of the amount
received therefore, or the authority of the Fund, as the case may be, to have
requested such sale or issuance;
(vi) the
legality of the declaration of any dividend by the Fund, or the legality of the
issue of any Interests in payment of any dividend;
(vii) the
legality of any recapitalization or readjustment of Interests;
(viii) Administrator’s
acting upon telephone or electronic instructions relating to the subscription or
tender of Interests received by Administrator in accordance with procedures
established by Administrator and the Fund;
(ix) the
acceptance, processing and/or negotiation of a fraudulent payment for the
purchase of Interests unless the result of Administrator’s or its affiliates’
willful misfeasance, bad faith or gross negligence in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement. In the absence of a finding to the contrary, the
acceptance, processing and/or negotiation of a fraudulent payment for the
subscription or tender of Interests shall be presumed not to have been the
result of Administrator’s or its affiliates’ willful misfeasance, bad faith or
gross negligence; and
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(x) the
offer or sale of Interests in violation of any requirement under the securities
laws or regulations of any state that such Interests be qualified for sale in
such state or in violation of any stop order or determination or ruling by any
state with respect to the offer or sale of such Interests in such
state.
(b) Administrator
will notify the Fund promptly after identifying any situation which it believes
presents or appears likely to present a Claim for which the Fund may be required
to indemnify or hold the Indemnified Parties harmless hereunder. In
such event, the Fund shall have the option to defend the Indemnified Parties
against any Claim, and, in the event that the Fund so elects, such defense shall
be conducted by counsel chosen by the Fund and approved by Administrator in its
reasonable discretion. The Indemnified Parties shall not confess any
Claim or make any compromise in any case in which the Fund will be asked to
provide indemnification, except with the Fund’s prior written
consent.
(c) The
obligations of the parties under Section 7 shall indefinitely survive the
termination of this Agreement.
8. Term
(a) This
Agreement shall become effective as of the date this Agreement is executed and
shall continue in effect until terminated as provided
herein. This Agreement shall continue in effect for a one-year (1)
period beginning on the date of this Agreement. Thereafter, if not
terminated as provided herein, the Agreement shall continue automatically in
effect for successive monthly periods.
(b) This
Agreement may be terminated by either party without penalty upon not less than
thirty (30) days’ written notice to the other party prior to the end of any term
(which notice may be waived by the other party entitled to such
notice). Notwithstanding anything herein to the contrary, upon the
termination of this Agreement or the liquidation of the Fund, the Administrator
shall deliver the records of the Fund in the form maintained by the
Administrator (to the extent permitted by applicable license agreements) to the
Board or person(s) designated by the Board at the Fund’s cost and expense, and
thereafter the Board or its designee shall be solely responsible for preserving
the records for the periods required by all applicable laws, rules and
regulations. The Administrator shall be entitled to maintain a copy of such
records for the sole purpose of defending itself against any action arising
under or as a result of this Agreement or as otherwise required or permitted by
law. The Fund shall be responsible for all expenses associated with
the movement (or duplication) of records and materials and conversion thereof to
a successor fund accounting and administrative services agent, including all
reasonable trailing expenses incurred by the Administrator. In
addition, in the event of termination of this Agreement, or the proposed
liquidation or merger of the Fund and the Administrator’s agreement to provide
additional services in connection therewith, the Administrator shall provide
such services and be entitled to such compensation as the parties may mutually
agree. Administrator shall not reduce the level of service provided to the Fund
prior to termination following notice of termination by the Fund.
12
9. Miscellaneous
(a) Any
notice required or permitted to be given by either party to the other under this
Agreement shall be in writing and shall be deemed to have been given when sent
by either an overnight delivery service or by registered or certified mail,
postage prepaid, return receipt requested, to the addresses listed below, or to
such other location as either party may from time to time designate in
writing:
If to
Administrator: X.X.
Xxxxx & Co., Inc.
0000
Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx,
Xxxx 00000-0000
Attention: President
If to the
Fund: Persimmon
Capital Management, L.P.
0000
Xxxxxx Xxxxxxx Xxxx
Xxxxxxx
Xxxx, Xxxxx 000
Xxxx
Xxxx, XX 00000
Attention:
Xxxxxxx X. Xxxx
(b) Except
as provided to the contrary herein, this Agreement may not be amended or
modified in any manner except by a written agreement executed by both parties
with the formality of this Agreement.
(c) This
Agreement shall be governed by Utah law, excluding the laws on conflicts of
laws. To the extent that the applicable laws of the State of Utah, or
any of the provisions herein, conflict with the applicable provisions of the
1940 Act, the latter shall control, and nothing herein shall be construed in a
manner inconsistent with the 1940 Act or any rule or order of the Commission
thereunder. Any provision of this Agreement which is determined by
competent authority to be prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. In
such case, the parties shall in good faith modify or substitute such provision
consistent with the original intent of the parties.
(d) This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original agreement but such counterparts shall together
constitute but one and the same instrument. The facsimile signature
of any party to this Agreement shall constitute the valid and binding execution
hereof by such party.
(e) The
services of Administrator hereunder are not deemed
exclusive. Administrator may render administration, fund accounting
and recordkeeping services and any other services to others, including hedge
funds.
(f) The
captions in the Agreement are included for convenience of reference only, and in
no way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
13
(g) This
Agreement is executed by the Fund and the obligations hereunder are not binding
upon officers or Investors, individually.
(h) This
Agreement and the Schedules incorporated herein constitute the full and complete
understanding and agreement of Administrator and the Fund and supersedes all
prior negotiations, understandings and agreements with respect to fund
accounting, administration and recordkeeping functions.
(i) Except
as specifically provided herein, this Agreement does not in any way affect any
other agreements entered into among the parties hereto and any actions taken or
omitted by any party hereunder shall not affect any rights or obligations of any
other party hereunder.
(j) Administrator
shall retain all right, title and interest in any and all computer programs,
screen formats, report formats, procedures, data bases, interactive design
techniques, derivative works, inventions, discoveries, patentable or
copyrightable matters, concepts, expertise, trade secrets, trademarks and other
related legal rights provided, developed or utilized by Administrator in
connection with the Services provided by Administrator to the Fund
hereunder.
(k) This
Agreement shall extend to and shall be binding upon the parties hereto, and
their respective successors and assigns. This Agreement shall not be
assignable by either party without the written consent of the other party,
provided, however, that Administrator may, in its sole discretion and upon
advance written notice to the Fund, assign all its right, title and interest in
this Agreement to an affiliate, parent or subsidiary, or to the purchaser of
substantially all of its business.
(l) Xxxxxxx
X. Xxxx, of Persimmon Capital Management, L.P. represents and warrants that he
is duly authorized to execute this Agreement on behalf of the Fund.
[Signature
page to follow.]
14
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by a duly authorized
officer as of the day, month and year first above written.
PERSIMMON
GROWTH PARTNERS
INVESTOR
FUND
(“Fund”)
|
|||
|
By:
|
||
Title: |
X.X.
XXXXX & CO., INC.
(“Administrator”)
|
|||
|
By:
|
||
Title: |
15
Schedule
A
to
the
by
and between
and
X.X.
Xxxxx & Co., Inc.
Services
Treasury
Function:
|
1.
|
Coordinate,
execute and give third party approval for all cash movements for investors
contributions/withdrawals, manager investments contributions/withdrawals
and payment of all fees and expenses for the
fund.
|
|
2.
|
Provide
weekly reconciliations of cash accounts to
client.
|
|
3.
|
Process
all subscription and redemption
documents.
|
|
·
|
Conduct
AML procedures on all proposed
subscriptions
|
|
·
|
Review
new subscription documents for
completeness
|
|
·
|
Notify
Persimmon of any rejected or suspect
subscriptions
|
|
·
|
Conduct
ongoing AML procedures as “Best
Practices”
|
|
4.
|
Provide
timely confirmation of subscriptions to investors and reconciliations to
the client of investor contributions/withdrawals on a monthly
basis.
|
Financial Accounting and
Investor Reporting:
|
1.
|
Set-up
the administrative and procedural
processes.
|
|
2.
|
Establish
and maintain the general ledgers.
|
|
3.
|
Reconcile
and confirm all Investor
contributions/withdrawals.
|
|
4.
|
Reconcile
the Investment Manager’s investments to all hedge fund, clearing, prime
broker, and bank and custody accounts on a monthly basis with trade
blotters provided by client.
|
|
5.
|
Consult
with the fund’s investment managers to obtain accurate and timely
performance evaluations on a monthly
basis.
|
|
6.
|
Establish,
reconcile, and maintain the Investor capital accounts, and effect all
appropriate allocations including new issue carve
outs.
|
|
7.
|
Calculate
management fees and performance
allocations.
|
|
8.
|
Generate
the financial reporting package as of each month end including the
Statements of Financial Position, Profit and Loss, Changes in Capital and
Changes in Investor’s Capital.
|
|
9.
|
Disseminate
1099’s, audited financials, and any monthly, quarterly or annual letters
as requested to the investors via
email/mail.
|
16
Regulatory administration
and compliance support services
|
1.
|
Compile
data for and prepare with respect to the Fund Semi-Annual Reports on Form
N-SAR and provide to Fund counsel for its review of the same; upon the
advice and direction of Fund counsel, file Form N-SAR with the Commission
as required.
|
|
2.
|
Prepare
and review the financial statement for the Fund’s Annual and Semi-Annual
Reports included in Form N-CSR as required under the Xxxxxxxx-Xxxxx Act;
assist in compiling exhibits and disclosures for Form N-CSR as requested
by the Board; provide to Fund counsel for its review of Form N-CSR; upon
the advice and direction of Fund counsel, file Form N-CSR with the
Commission as required.
|
|
3.
|
In
connection with the Fund’s first and third fiscal quarters, prepare Form
N-Q and provide to Fund counsel for its review of the same; upon the
advice and direction of Fund counsel, file Form N-Q with the Commission as
required.
|
|
4.
|
Subject
to having received all relevant information from the Fund and upon the
advice and direction of Fund counsel, prepare Form N-PX and provide to
Fund counsel for its review of the same; upon the advice and direction of
Fund counsel, file Form N-PX with the Commission as
required.
|
|
5.
|
Provide
financial and Fund performance information for inclusion in the
Registration Statement for the Fund (on Form N-2 or any replacement
thereof) and any amendments thereto, subject to the review of Fund
counsel.
|
|
6.
|
Upon
the advice and direction of Fund counsel, coordinate and, in conjunction
with the transfer agency services, carry out periodic tender offers for
the Fund (initial forms for such tender offers shall be prepared by Fund
counsel) and assist in the coordination of tender offers made by the Fund,
which shall include (i) distributing tender offer letters to investors,
(ii) delivering promissory notes to investors whose tender orders have
been accepted, as described in the Offering Memorandum, and (iii)
coordinating the calculation of holdback
amounts.
|
|
7.
|
Provide
a report of the administrator, including financial and Fund performance
information for inclusion in the board materials on a quarterly
basis.
|
Tax Preparation,
Compliance and Reporting:
|
1.
|
Calculate
each investors share of taxable income and provide annual 1099 tax
forms.
|
|
2.
|
Generate
and file the Fund’s Federal Tax Return - 1120-RIC and all appropriate
State Tax filings.
|
|
3.
|
Initial
review of the Fund’s documents for completeness and conformity with U.S.
tax law and provide suggestions and
solutions.
|
|
4.
|
Provide
tax consulting and advice on an as needed basis with respect to
transactions or structuring changes within the
Fund.
|
17
Audit
Coordination:
|
1.Coordinate
and oversee the annual audit of the Fund’s financial
statements.
|
|
a.
|
Conduct
all stages of audit planning and
coordination.
|
|
b.
|
Prepare
work papers and schedules for
auditors.
|
|
c.
|
Prepare
financial statements, footnotes, and report
drafts.
|
|
d.
|
Act
as liaison between auditors and client on any audit
issues.
|
18
Schedule
B
to
the
by
and between
and
X.X.
Xxxxx & Co., Inc.
Fees
Annual
Base Accounting Fee
|
$10,000 | |
Annual
Regulatory Administration and Compliance Support Services
Fee
|
$5,000 | |
Federal
Tax Return 1120-RIC and Form 1099 preparation fee**
|
1.0
basis point
|
**
Subject to a cap of $10,000 per annum
Fees for
services not contemplated by this schedule will be negotiated on a case-by-case
basis.
19