Exhibit (k)(2)
FORM OF INVESTOR AND FUND SERVICING AGREEMENT
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THIS AGREEMENT (the "Agreement") is made as of the [ ] day of [
], 2005, by and between Xxxxxxx Xxxxx Hedge Fund Partners Registered Fund,
LLC, a Delaware limited liability company (the "Fund"), and Xxxxxxx Sachs
Hedge Fund Strategies LLC, a Delaware limited liability company ("HFS").
WHEREAS, the Fund is registered under the Investment Company Act
of 1940 (the "Investment Company Act") and is subject to regulation as such
under applicable federal securities laws;
WHEREAS, units of membership interest in the Fund ("Units") are
publicly offered pursuant to the provisions of the Securities Act of 1933;
WHEREAS, the Fund wishes to retain HFS (in such capacity, the
"Investor Servicing Agent") to provide, or to retain parties to provide,
(a) certain investor services and account maintenance services to members
of the Fund ("Members") who acquire Units; and (b) other services necessary
for the operations of the Fund and the provision of investor services to
Members (collectively, "Investor Services");
WHEREAS, HFS wishes to provide, or retain other parties to
provide, such Investor Services;
NOW THEREFORE, in consideration of the promises and mutual
covenants herein contained, it is agreed by the parties as follows:
1. Appointment of HFS.
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The Fund hereby authorizes the Investor Servicing Agent to
provide, and/or retain other parties (including broker-dealers or financial
advisers) to provide, Investor Services to Members and the Fund. Such
Investor Services shall include, to the extent such Investor Services are
not required to be performed by the Fund's administrator or other parties
pursuant to the Fund's administration agreement or otherwise:
(a) providing supervision of all aspects of the Fund's
operations;
(b) providing the Fund with personnel to perform such
executive, administrative and clerical services as are reasonably necessary
to provide effective administration of the Fund and Member services;
(c) as agreed from time to time with the Board of managers
of the Fund ("Managers") in accordance with Rule 38a-1 under the Investment
Company Act, making available the services of appropriate compliance
personnel and resources relating to compliance policies and procedures of
the Fund;
(d) providing the Fund with office space and office
equipment and services including telephone service, heat, utilities,
stationary supplies and similar items;
(e) assisting in the establishment of Member accounts;
(f) providing ongoing account maintenance services to
Members, including handling inquiries from Members regarding the Fund;
(g) assisting in communicating with Members and providing
information about the Fund, Units owned by Members, repurchase offers and
other activities of the Fund;
(h) assisting in enhancement of relations and communication
between Members and the Fund;
(i) handling Member inquiries and calls relating to
administrative matters;
(j) assisting in the maintenance of the Fund's records with
respect to the Members;
(k) assisting the Fund in providing or procuring accounting
services for the Fund and Member capital accounts;
(l) assisting in administrating meetings of the Board of
Managers and its committees and the Members;
(m) assisting in administering subscriptions and tender
offers, including assistance in the preparation of regulatory filings and
the transmission of cash between Members and the Fund, and the Fund and
Xxxxxxx Xxxxx Hedge Fund Partners Registered Master Fund, LLC (or any
successor thereto designated by the Fund);
(n) assisting in arranging for, at the Fund's expense, the
preparation of all required tax returns;
(o) assisting in the periodic updating of the Fund's
prospectus and statement of additional information, the preparation of
proxy statements to Members, and the preparation of reports filed with
regulatory authorities;
(p) periodically reviewing the services performed by the
Fund's service providers, and making such reports and recommendations to
the Board of Managers concerning the performance of such services as the
Board of Managers reasonably requests;
(q) to the extent requested by the Board of Managers or
officers of the Fund, negotiating changes to the terms and provisions of
the Fund's custody, administration and escrow agreements;
(r) providing information and assistance as requested in
connection with the registration of the Fund's Units in accordance with
state securities requirements;
(s) providing assistance in connection with the preparation
of the Fund's periodic financial statements and annual audit as reasonably
requested by the Board of Managers or officers of the Fund or the Fund's
independent accountants;
(t) providing other information and Member liaison and
related services; and
(u) providing other administrative services to the Fund.
2. Use of Name.
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(a) As licensee of the rights to use and sublicense the use
of the name "Xxxxxxx Sachs" and any trademarks or derivatives thereof or
logo associated therewith, the Investor Servicing Agent hereby grants the
Fund a non-exclusive right and sublicense to use (i) the Xxxxxxx Xxxxx name
and xxxx as part of the Fund's name, and (ii) in connection with the Fund's
investment products and services, in each case only for so long as this
Agreement, any other investor servicing agreement between the Fund and the
Investor Servicing Agent (or any organization which shall have succeeded to
the Investor Servicing Agent's business as investment servicing agent (the
"Investor Servicing Agent's Successor")), or any extension, renewal or
amendment hereof or thereof remains in effect, and only for so long as the
Investor Servicing Agent is a licensee of the Xxxxxxx Xxxxx name and xxxx.
The Fund agrees that it shall have no right to sublicense or assign rights
to use the Xxxxxxx Xxxxx name and xxxx, it shall acquire no interest in the
Xxxxxxx Xxxxx name and xxxx other than the rights granted herein and the
Fund shall not challenge the validity of the Xxxxxxx Xxxxx name and xxxx or
the ownership thereof.
(b) The Fund further agrees that all services and products
it offers in connection with the Xxxxxxx Xxxxx name and xxxx shall meet
commercially reasonable standards of quality, as may be determined by the
Investor Servicing Agent from time to time. At the Investor Servicing
Agent's reasonable request, the Fund shall cooperate with the Investor
Servicing Agent and shall execute and deliver any and all documents
necessary to maintain the Xxxxxxx Xxxxx name and xxxx and protect
(including, but not limited to any trademark infringement action) the
Investor Servicing Agent and/or enter the Fund as a registered user
thereof.
(c) At such time as this Agreement or any other investor
servicing agreement shall no longer be in effect between the Investor
Servicing Agent (or the Investor Servicing Agent's Successor) and the Fund,
or the Investor Servicing Agent no longer is a licensee of the Xxxxxxx
Xxxxx name and xxxx, the Fund shall (to the extent that, and as soon as, it
lawfully can) cease to use the current name of the Fund or any other name
indicating that it is managed by or otherwise connected with the Investor
Servicing Agent (or the Investor Servicing Agent's Successor). In no event
shall the Fund use the Xxxxxxx Xxxxx name and xxxx or any other name or
xxxx confusingly similar thereto (including, but not limited to, any name
or xxxx that includes the name "Xxxxxxx Xxxxx" or "GS") if this Agreement
or any other investor servicing agreement between the Investor Servicing
Agent (or the Investor Servicing Agent's Successor) and the Fund is
terminated.
3. Investor Servicing Fee.
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(a) In consideration for the Investor Servicing Agent
providing (or engaging other parties to provide) the Investor Services, the
Fund will pay the Investor Servicing Agent a monthly investor servicing fee
("Investor Servicing Fee") equal to 1/12 of 0.50% (0.50% on an annualized
basis) of the Fund's net assets as of each month-end.
(b) The Investor Servicing Agent may pay amounts that it
receives pursuant to this Section 3 to any person, including any
"affiliated person" (as such term is defined in the Investment Company Act)
of the Investor Servicing Agent, if such person provides Investor Services.
4. Allocation of Expenses.
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(a) All costs and expenses of the Fund not expressly assumed
by the Investor Servicing Agent under this Agreement pursuant to clause (b)
of this Section 4 shall be paid by the Fund including, but not limited to,
any fees and expenses in connection with the organization of the Fund and
the offering and issuance of Units; all fees and expenses directly related
to portfolio transactions and positions for the Fund's account such as
direct and indirect expenses associated with the Fund's investments,
including its investments, through Xxxxxxx Sachs Hedge Fund Partners
Registered Master Fund, LLC (the "Master Fund"), in investment funds, and
enforcing the Fund's rights in respect of such investments; the Fund's pro
rata share of the investment management fee payable by the Master Fund to
HFS in its capacity as investment manager of the Master Fund; quotation or
valuation expenses; the Investor Servicing Fee and the fees and expenses of
the Fund's administrator; brokerage commissions; interest and fees on any
borrowings by the Fund; professional fees (including, without limitation,
expenses of consultants, experts and specialists); research expenses; fees
and expenses of outside legal counsel (including fees and expenses
associated with the review of documentation for prospective investments by
the Fund), including foreign legal counsel; accounting, auditing and tax
preparation expenses; fees and expenses in connection with repurchase
offers and any repurchases or redemptions of Units; taxes and governmental
fees (including tax preparation fees); fees and expenses of any custodian,
subcustodian, transfer agent, and registrar, and any other agent of the
Fund; all costs and charges for equipment or services used in communicating
information regarding the Fund's transactions among the Investor Servicing
Agent and any custodian or other agent engaged by the Fund; bank services
fees; costs and expenses relating to any amendment of the Fund's limited
liability company agreement (the "LLC Agreement") or the Fund's other
organizational documents; expenses of preparing, amending, printing, and
distributing prospectuses, SAIs, and any other sales material (and any
supplements or amendments thereto), reports, notices, other communications
to members, and proxy materials; expenses of preparing, printing, and
filing reports and other documents with government agencies; expenses of
Members' meetings, including the solicitation of proxies in connection
therewith; expenses of corporate data processing and related services;
Member recordkeeping and Member account services, fees, and disbursements;
expenses relating to investor and public relations; fees and expenses of
the Managers who are not employees of the Investor Servicing Agent or its
affiliates; insurance premiums; Extraordinary Expenses (as defined below);
and all costs and expenses incurred as a result of dissolution, winding-up
and termination of the Fund.
"Extraordinary Expenses" means all expenses incurred by the Fund
outside of the ordinary course of its business, including, without
limitation, costs incurred in connection with any claim, litigation,
arbitration, mediation, government investigation or dispute and the amount
of any judgment or settlement paid in connection therewith, or the
enforcement of the Fund's rights against any person or entity; costs and
expenses for indemnification or contribution payable by the Fund to any
person or entity (including, without limitation, pursuant to the
indemnification obligations contained in the LLC Agreement); expenses of a
reorganization, restructuring or merger of the Fund; expenses of holding,
or soliciting proxies for, a meeting of members of the Fund; and the
expenses of engaging a new administrator, custodian, transfer agent or
escrow agent.
(b) The Investor Servicing Agent will bear all of its
expenses and its own costs incurred in providing Investor Services to the
Fund under this Agreement. In addition, the Investor Servicing Agent is
responsible for the payment of the compensation and expenses of those
Managers and officers of the Fund affiliated with the Investor Servicing
Agent, and making available, without expense to the Fund, the services of
such individuals, subject to their individual consent to serve and to any
limitations imposed by law.
5. Duties of the Investor Servicing Agent.
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(a) The Investor Servicing Agent agrees to provide Investor
Services, or to engage other parties to provide Investor Services and
compensate such parties for their services.
(b) The Investor Servicing Agent shall, if requested, report
to the Board of Managers of the Fund (the "Board") on a quarterly basis
regarding: (i) the nature of the Investor Services provided by the Investor
Servicing Agent or other persons; (ii) the amount of payments by the
Investor Servicing Agent to such persons; and (iii) the amount of the
Investor Servicing Fee paid by the Fund, in each case, with respect to the
quarterly period then ending.
6. Recordkeeping and Reports.
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The Investor Servicing Agent shall maintain all books and records
of the Fund required by Rule 31a-1 under the Investment Company Act (other
than those records being maintained by the Fund's distributor,
administrator, custodian or transfer agent) and preserve such records for
the periods prescribed therefore by Rule 31a-2 of the Investment Company
Act.
7. Liability of the Fund.
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The Investor Servicing Agent understands and agrees that the
obligations of the Fund under this Agreement are not binding upon any
Member, or any person serving on the Board of Managers, personally, but
bind only the Fund and the Fund's property. The Investor Servicing Agent
represents that it has notice of the provisions of the LLC Agreement, as
amended, disclaiming Member and Manager liability for acts and obligations
of the Fund.
8. Independent Contractor.
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The Investor Servicing Agent shall for all purposes herein be
deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Board of Managers from time
to time, have no authority to act for or represent the Fund in any way or
otherwise be deemed its agent.
9. Liability.
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None of the Investor Servicing Agent, its affiliates, partners,
managers, members, principals, directors, officers or employees, nor any of
their executors, heirs, assigns, successors or other legal representatives
(each an "Indemnified Person" and collectively the "Indemnified Persons")
shall be liable for any error of judgment, for any mistake of law or for
any act or omission by such person in connection with the performance or
non-performance of services to the Fund hereunder, in the absence of
willful misfeasance, bad faith, or gross negligence in the performance or
non-performance of the Investor Servicing Agent's duties hereunder, or by
reason of reckless disregard of the Investor Servicing Agent's obligations
and duties hereunder (collectively, "disabling conduct"). Any person, even
though also employed by the Investor Servicing Agent, who may be or become
an employee of the Fund and paid by the Fund shall be deemed, when acting
within the scope of his or her employment by the Fund, to be acting in such
employment solely for the Fund and not as an employee or agent of the
Investor Servicing Agent.
10. Indemnification.
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(a) To the fullest extent permitted by law, the Fund shall,
subject to Section 10(b) hereof, indemnify, defend and hold harmless each
Indemnified Person from or against all losses, charges, expenses,
assessments, claims, damages, costs and liabilities ("Losses"), including,
but not limited to, amounts paid in satisfaction of judgments, in
compromise, or as fines or penalties, and reasonable counsel fees and
disbursements, incurred in connection with the defense or disposition of
any action, suit, investigation or other proceeding, whether civil or
criminal, before any judicial, arbitral, administrative or legislative
body, in which such Indemnified Person may be or may have been involved as
a party or otherwise, or with which such Indemnified Person may be or may
have been threatened, by reason of the past or present performance of
services to the Fund by such Indemnified Person, except to the extent such
Losses shall have been finally determined in a non-appealable decision on
the merits in any such action, suit, investigation or other proceeding to
have been incurred or suffered by such Indemnified Person by reason of
disabling conduct.
(b) Expenses, including reasonable counsel fees and
disbursements, so incurred by any such Indemnified Person (but excluding
amounts paid in satisfaction of judgments, in compromise, or as fines or
penalties), may be paid from time to time by the Fund in advance of the
final disposition of any such action, suit, investigation or proceeding
upon receipt of an undertaking by or on behalf of such Indemnified Person
to repay to the Fund amounts so paid if it shall ultimately be determined
that indemnification of such expenses is not authorized under Section 10
hereof; provided, however, that (i) such Indemnified Person shall provide
security for such undertaking, (ii) the Fund shall be insured by or on
behalf of such Indemnified Person against Losses arising by reason of such
Indemnified Person's failure to fulfill his or its undertaking, or (iii) a
majority of the Managers who are not parties to the proceeding or
independent legal counsel in a written opinion shall determine based on a
review of readily available facts (as opposed to a full trial-type inquiry)
that there is reason to believe such Indemnified Person ultimately will be
entitled to indemnification.
(c) As to the disposition of any action, suit, investigation
or proceeding (whether by a compromise payment, pursuant to a consent
decree or otherwise) without an adjudication or a decision on the merits by
a court, or by any other body before which the proceeding shall have been
brought, that an Indemnified Person is liable to the Fund or its members by
reason of disabling conduct, indemnification shall be provided pursuant to
Section 10 hereof if (i) approved as in the best interests of the Fund by a
majority of the Managers who are not parties to the proceeding upon a
determination based upon a review of readily available facts (as opposed to
a full trial-type inquiry) that such Indemnified Person acted in good faith
and in the reasonable belief that such actions were in the best interests
of the Fund and that such Indemnified Person is not liable to the Fund or
its members by reason of disabling conduct, or (ii) the Board of Managers
secures a written opinion of independent legal counsel based upon a review
of readily available facts (as opposed to a full trial-type inquiry) to the
effect that such Indemnified Person acted in good faith and in the
reasonable belief that such actions were in the best interests of the Fund
and that such Indemnified Person is not liable to the Fund or its members
by reason of disabling conduct.
(d) Any indemnification or advancement of expenses made
pursuant to this Section 10 shall not prevent the recovery from any
Indemnified Person of any such amount if such Indemnified Person
subsequently shall be determined in a final decision on the merits of any
court of competent jurisdiction in any action, suit, investigation or
proceeding involving the liability or expense that gave rise to such
indemnification or advancement of expenses to be liable to the Fund or its
members by reason of disabling conduct. In any suit brought by an
Indemnified Person to enforce a right to indemnification under this Section
10 it shall be a defense that, and in any suit in the name of the Fund to
recover any indemnification or advancement of expenses made pursuant to
this Section 10 the Fund shall be entitled to recover such expenses upon a
final adjudication that, the Indemnified Person has not met the applicable
standard of conduct set forth in this Section 10. In any such suit brought
to enforce a right to indemnification or to recover any indemnification or
advancement of expenses made pursuant to this Section 10, the burden of
proving that the Indemnified Person is not entitled to be indemnified, or
to any indemnification or advancement of expenses, under this Section 10
shall be on the Fund (or any member acting derivatively or otherwise on
behalf of the Fund or its members).
(e) The rights of indemnification provided in this Section
10 shall not be exclusive or affect any other right to which any
Indemnified Person may be entitled by contract or otherwise under law.
Notwithstanding anything in this Section 10 to the contrary, the provisions
of this Section 10 shall not be construed so as to relieve the Indemnified
Person of, or provide indemnification with respect to, any liability
(including liability under Federal securities laws, which, under certain
circumstances, impose liability even on persons who act in good faith) to
the extent (but only to the extent) that such liability may not be waived,
limited, or modified under applicable law or that such indemnification
would be in violation of applicable law, but shall be construed so as to
effectuate the provisions of this Section 10 to the fullest extent
permitted by law. The provisions of this Section 10 shall indefinitely
survive the termination or cancellation of this Agreement.
(f) The Investor Servicing Agent (and the other Indemnified
Persons) may rely upon and, in the absence of disabling conduct, shall be
protected in acting upon any document which it reasonably believes to be
genuine and to have been signed or presented by the proper person or
persons. The Investor Servicing Agent (and the other Indemnified Persons)
shall not be held to have notice of any change of authority of any Manager,
officer, employee or agent of the Fund until receipt of written notice
thereof from the Fund.
(g) In the absence of disabling conduct, nothing herein
shall make the Investor Servicing Agent (and the other Indemnified Persons)
liable for the performance or omissions of unaffiliated third parties not
under the Investor Servicing Agent's reasonable control such as, by way of
example and not limitation, custodians, brokers, subadvisers, postal or
delivery services, telecommunications providers and processing and
settlement services.
11. Duration.
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This Agreement will take effect on the date first set forth above
and remain in effect until terminated pursuant to Section 11 or 12 hereof.
Unless earlier terminated pursuant to Section 11 or 12 hereof, this
Agreement shall remain in effect for a period of two (2) years from such
date and thereafter for succeeding one-year periods, so long as such
continuance shall be approved at least annually by the Board, including the
vote of the majority of the Managers who are not parties to this Agreement
or "interested persons" (as such term is defined in the Investment Company
Act) of any such party.
12. Assignments or Amendment.
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Any amendment to this Agreement shall be in writing and shall be
subject to the approval of the Board, including the vote of a majority of
the Managers who are not "interested persons" of the Fund. This Agreement
shall automatically and immediately terminate in the event of its
"assignment," as such term is defined in the Investment Company Act, and
the rules thereunder.
13. Notice.
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Any notice or communication required to be given by either party
to the other shall be deemed sufficient if sent be registered or certified
mail, Federal Express (or substantially similar delivery service),
facsimile and confirmed in writing, addressed by the party giving notice to
the other party at its address as follows:
(a) If to the Investor Servicing Agent:
Xxxxxxx Xxxxx Hedge Fund Strategies LLC
000 Xx. Xxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: General Counsel
(b) If to the Fund:
Xxxxxxx Xxxxx Hedge Fund Partners Registered
Fund, LLC
000 Xx. Xxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Chief Executive Officer
with a copy to:
Xxxxxxx, Xxxxx & Co.
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: General Counsel, Investment Management Division
14. Termination.
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This Agreement may be terminated (i) by the Investor Servicing
Agent at any time without penalty upon 60 days' written notice to the Fund
(which notice may be waived by the Fund); or (ii) by the Fund at any time
without penalty upon 60 days' written notice to the Investor Servicing
Agent (which notice may be waived by the Investor Servicing Agent). Any
termination of this Agreement shall not affect the obligation of the Fund
to pay the amount of the Investor Servicing Fee then owing hereunder, or to
reimburse the Investor Servicing Agent for payments made or obligations
incurred prior to such termination.
15. Governing Law.
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This Agreement shall be construed in accordance with the laws of
the State of New York, without giving effect to the conflicts of laws
principles thereof, and the applicable provisions of Federal law. To the
extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of Federal law,
the latter shall control.
16. Severability.
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If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be effected thereby and, to this extent, the provisions
of this Agreement shall be deemed to be severable.
17. Counterparts.
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This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, and it shall not
be necessary in making proof of this Agreement to product or account for
more than one such counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement by
their officers thereunto duly authorized as of the day and year first
written above.
XXXXXXX SACHS HEDGE FUND PARTNERS
REGISTERED FUND, LLC
By:
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Name:
Title:
XXXXXXX XXXXX HEDGE FUND STRATEGIES LLC
By:
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Name:
Title:
