SUB-ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 23rd day of December, 2002, by and
between Mercantile Capital Advisors, Inc., a Maryland corporation (the
"Administrator"), and SEI Investments Global Funds Services (the
"Sub-Administrator"), a Delaware business trust.
WHEREAS, the Administrator has entered into Administration Agreements,
dated December 23, 2002, (the "Administration Agreements"), with Mercantile
Absolute Return Fund LLC, Mercantile Alternative Strategies Fund LLC and
Mercantile Long-Short Manager Fund LLC (each a "Fund" collectively, the
"Funds"), each Fund is registered as a non-diversified, closed-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act") consisting of limited liability company interests (the "Interests");
and
WHEREAS, the Administrator desires to retain the Sub-Administrator to
assist it in performing administrative and accounting services to the Funds and
the Sub-Administrator is willing to provide such services on the terms and
conditions hereinafter set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Administrator and the Sub-Administrator hereby agree
as follows:
ARTICLE 1. Retention of the Sub-Administrator. The Administrator hereby
retains the Sub-Administrator to furnish the Funds with accounting,
administrative and recordkeeping services as set forth in this Agreement, and
the Sub-Administrator hereby accepts such employment. The Sub-Administrator
shall be deemed to be an independent contractor for all purposes herein.
ARTICLE 2. Administrative and Accounting Services. The Sub-Administrator
shall perform or arrange for and supervise the performance by others of the
accounting and administrative services set forth in Schedule A hereto. In
performing its duties under this Agreement, the Sub-Administrator will act in
all material respects in accordance with each Fund's Limited Liability Company
Agreement (the "LLC Agreement") and Offering Memorandum as they may be amended
(provided copies are delivered to the Sub-Administrator). The Sub-Administrator
(i) shall not have or be required to have any authority to supervise the
investment or reinvestment of the securities or other properties which comprise
the assets of the Funds and (ii) shall not provide any investment advisory
services to the Funds, and shall have no liability related to the foregoing. The
Sub-Administrator shall provide the Funds with all necessary office space,
equipment, supplies, personnel, compensation and facilities (including
facilities for Members' and Board of Directors meetings) for providing such
services identified in Schedule A. The Sub-Administrator may sub-contract with
third parties to perform certain of the services to be performed by the
Sub-Administrator hereunder; provided, however, that the Sub-Administrator shall
remain principally responsible to the Administrator for the acts and omissions
of such other entities. In meeting its duties hereunder, Sub-Administrator shall
have the general authority to do all acts deemed in the Sub-Administrator's good
faith belief to be necessary and proper to perform its obligations under this
Agreement.
1
ARTICLE 3. Allocation of Charges and Expenses.
(A) The Sub-Administrator. The Sub-Administrator shall furnish at its own
expense the executive, supervisory and clerical personnel necessary to perform
its obligations under this Agreement. The Sub-Administrator shall also pay all
compensation, if any, of officers of the Funds who are affiliated persons of the
Sub-Administrator or any affiliated corporation of the Sub-Administrator;
provided, however, that unless otherwise specifically provided, the
Sub-Administrator shall not be obligated to pay the compensation of any employee
of the Administrator retained by the Directors of the Funds to perform services
on behalf of the Funds.
(B) Fund Expenses. Each Fund assumes and shall pay or cause to be paid all
other expenses of the Fund not otherwise allocated in this Agreement, including,
without limitation, organizational costs, taxes, expenses for legal and auditing
services, the expenses of preparing (including typesetting), printing and
mailing reports, prospectuses, statements of additional information, proxy
solicitation and tender offer materials and notices to existing members, all
expenses incurred in connection with issuing and redeeming Interests, the costs
of pricing services, the costs of custodial services, the cost of initial and
ongoing registration of the Interests under Federal and state securities laws,
fees and out-of-pocket expenses of Directors who are not affiliated persons of
the Sub-Administrator or any affiliated corporation of the Sub-Administrator,
the costs of Directors' meetings, insurance, interest, brokerage costs,
litigation and other extraordinary or nonrecurring expenses, and all fees and
charges of service providers to the Funds. The Administrator shall reimburse the
Sub-Administrator for its reasonable out-of-pocket expenses, including all
reasonable charges for SAS 70 audit charges, and reasonable copying, postage,
telephone, and fax charges incurred by the Sub-Administrator in the performance
of its duties.
ARTICLE 4. Compensation of the Sub-Administrator. The Administrator shall
pay to the Sub-Administrator compensation at the annual rate specified in
Schedule B to this Agreement until this Agreement is terminated in accordance
with Article 6. Such compensation shall be calculated and accrued monthly, and
paid to the Sub-Administrator quarterly, within 30 days of quarter-end,
otherwise the Sub-Administrator shall be entitled to charge and/or set-off such
amounts against any account of the Administrator. If this Agreement becomes
effective subsequent to the first day of a month or terminates before the last
day of a month, the Sub-Administrator's compensation for that part of the month
in which this Agreement is in effect shall be prorated in a manner consistent
with the calculation of the fees as set forth above. Payment of the
Sub-Administrator's compensation for the preceding month shall be made promptly.
ARTICLE 5. Standard of Care; Limitation of Liability of the
Sub-Administrator. The Sub-Administrator shall exercise due care and diligence
to ensure the accuracy of all services performed under this Agreement. The
duties of the Sub-Administrator shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted against the
Sub-Administrator hereunder. The Sub-Administrator shall not be liable for any
error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in carrying out its duties hereunder,
except a loss resulting from willful misfeasance, bad faith or gross negligence
in the performance of its duties, or by reason of reckless disregard of its
obligations and duties hereunder. (As used in this Article 5, the term
"Sub-Administrator" shall include officers,
2
employees and other agents of the Sub-Administrator as well as that entity
itself.) Under no circumstances shall the Sub-Administrator be liable to the
Administrator for consequential, indirect or punitive damages. So long as the
Sub-Administrator, or its agents, acts without willful misfeasance, bad faith or
gross negligence in the performance of its duties, and without reckless
disregard of its obligations and duties hereunder, the Administrator assumes
full responsibility and shall indemnify the Sub-Administrator and hold it
harmless from and against any and all actions, suits and claims, whether
groundless or otherwise, and from and against any and all losses, damages,
costs, charges, reasonable counsel fees and disbursements, payments, expenses
and liabilities (including reasonable investigation expenses) arising directly
or indirectly out of any act or omission of the Sub-Administrator in carrying
out its duties hereunder. The indemnity and defense provisions set forth herein
shall indefinitely survive the termination of this Agreement.
So long as the Administrator, or its agents, acts without willful
misfeasance, bad faith or gross negligence in the performance of its duties, and
without reckless disregard of its obligations and duties hereunder, the
Sub-Administrator assumes full responsibility and shall indemnify the
Administrator and hold it harmless from and against any and all actions, suits
and claims, whether groundless or otherwise, and from and against any and all
losses, damages, costs, charges, reasonable counsel fees and disbursements,
payments, expenses and liabilities (including reasonable investigation expenses)
arising directly or indirectly out of the Sub-Administrator's willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties hereunder. The indemnity and defense provisions set forth
herein shall indefinitely survive the termination of this Agreement.
The indemnification rights hereunder shall include the right to reasonable
advances of defense expenses in the event of any pending or threatened
litigation with respect to which indemnification hereunder may ultimately be
merited. If in any case a party hereunder (the "Indemnifying Party") is asked to
indemnify or hold the other party harmless (the "Indemnified Party"), the
Indemnified Party shall promptly notify and advise the Indemnifying Party of the
pertinent facts concerning the situation in question, and the Indemnified Party
will use all reasonable care to identify and notify the Indemnifying Party
promptly concerning any situation which presents or appears likely to present
the probability of such a claim for indemnification, but failure to do so shall
not affect the rights hereunder.
The Indemnifying Party shall be entitled to participate at its own expense
or, if it so elects, to assume the defense of any suit brought to enforce any
claims subject to this indemnity provision. If the Indemnifying Party elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the Indemnifying Party and satisfactory to the Indemnified Party,
whose approval shall not be unreasonably withheld. In the event that the
Indemnifying Party elects to assume the defense of any suit and retain counsel,
the Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it. If the Indemnifying Party does not elect to assume the defense
of a suit, it will reimburse the Indemnified Party for reasonable fees and
expenses of any counsel retained by the Indemnified Party.
The Indemnified Party may apply to the Indemnifying Party at any time for
instructions and may consult counsel for the Indemnifying Party or the Funds as
applicable, or its own counsel and
3
with each Fund's accountants and other experts, at the Indemnifying Party's
expense, with respect to any matter arising in connection with the Indemnified
Party's duties. The Indemnified Party shall not be liable or accountable for any
action taken or omitted by it in good faith in accordance with such instruction
or with the opinion of such counsel, accountants or other experts.
Also, the Indemnified Party 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 authorized person or persons. Nor shall the Indemnified Party be
held to have notice of any change of authority of any officers, employee or
agent of the Indemnifying Party until receipt of written notice thereof from the
Indemnifying Party.
Nothing herein shall make the Indemnified Party liable for the performance
or omissions of unaffiliated third parties not under the Indemnified Party's
reasonable control unless the Indemnified Party has delegated its duties
hereunder to such third party such as, by way of example and not limitation,
investment advisers or sub-advisers, postal or delivery services,
telecommunications providers and processing and settlement services.
The Sub-Administrator is entitled to rely on the price information
provided by the underlying funds in which the Funds invest, and brokers in order
to calculate each Fund's net asset value and the Sub-Administrator shall not be
liable for any valuation errors resulting from the use of such information,
provided the Sub-Administrator complies with the valuation procedures described
in the prospectus and adopted by each Fund.
ARTICLE 6. Duration and Termination of this Agreement. This Agreement
shall become effective on the date set forth in Schedule B hereto and shall
remain in effect for the full duration of the Initial Term and each Renewal
Term, each as set forth in Schedule B, unless terminated in accordance with the
provisions of this Article 6. This Agreement may be terminated only: (a) by
either party at the end of the Initial Term or the end of any Renewal Term on 90
days prior written notice; (b) by either party hereto on such date as is
specified in written notice given by the terminating party, in the event of a
material breach of this Agreement by the other party, provided the terminating
party has notified the other party of such material breach at least 45 days
prior to the specified date of termination and the breaching party has not
remedied such breach by the specified date; or (c) as to any Fund, effective
upon the liquidation of such Fund. For purposes of this paragraph, the term
"liquidation" shall mean a transaction in which the assets of a Fund are sold or
otherwise disposed of and proceeds therefrom are distributed in cash to the
members in complete liquidation of the interests of such members.
ARTICLE 7. Activities of the Sub-Administrator. The services of the
Sub-Administrator rendered to the Administrator are not to be deemed to be
exclusive. The Sub-Administrator is free to render such services to others and
to have other businesses and interests.
ARTICLE 8. Proprietary and Confidential Information. The Sub-Administrator
agrees on behalf of itself and its employees to treat confidentially and as
proprietary information all records and other information relative to the
Administrator and its affiliates received by the Sub-Administrator in connection
with this Agreement, including any non-public personal information as
4
defined in Regulation S-P, and that it shall not use or disclose any such
information except for the purpose of carrying out the terms of this Agreement;
provided, however, that Sub-Administrator may disclose such information as
required by law, or after prior notification to and approval in writing by the
Administrator, which approval may not be withheld where the Sub-Administrator
may be exposed to civil or criminal contempt proceedings or penalties for
failure to comply.
ARTICLE 9. Certain Records. The Sub-Administrator shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the
Sub-Administrator on behalf of the Administrator shall be prepared and
maintained at the expense of the Sub-Administrator, but shall be the property of
the Administrator and will be made available to or surrendered promptly to the
Administrator on request.
In case of any request or demand for the inspection of such records by
another party, the Sub-Administrator shall notify the Administrator and follow
the Administrator's instructions as to permitting or refusing such inspection;
provided that the Sub-Administrator may exhibit such records to any person in
any case where it is advised by its counsel that it may be held liable for
failure to do so, unless (in cases involving potential exposure only to civil
liability) the Administrator has agreed to indemnify the Sub-Administrator
against such liability.
ARTICLE 10. Compliance with Governmental Rules and Regulations. The
Sub-Administrator undertakes to comply in all material respects with applicable
requirements of the Securities Act of 1933, the Securities Exchange Act of 1934,
the 1940 Act, the USA Patriot Act and any laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties to be
performed by the Sub-Administrator hereunder including any applicable anti-money
laundering laws and regulations.
ARTICLE 11. Internet Access. Data and information may be made
electronically accessible to the Administrator and each Fund's investment
manager and/or investment advisers through Internet access to one or more links
provided by the Sub-Administrator ("Web Link"). All rights in Web Link
(including text and "look and feel" attributes) are owned by the
Sub-Administrator. Any commercial use of the content or any other aspect of Web
Link requires the written permission of the Sub-Administrator. Use of the Web
Link by the Administrator or its agents will be subject to any terms of use set
forth on the web site. Web Link and the information (including text, graphics
and functionality) in the Web Link is presented "As Is" and "As Available"
without express or implied warranties including, but not limited to, implied
warranties of non-infringement, merchantability and fitness for a particular
purpose. The Sub-Administrator neither warrants that the Web Link will be
uninterrupted or error free, nor guarantees the accessibility, reliability,
performance, timeliness, sequence, or completeness of information provided on
the Web Link.
ARTICLE 12. Entire Agreement; Amendments. This Agreement constitutes the
entire agreement between the parties hereto and supersedes any prior agreement,
draft or proposal with respect to the subject matter hereof. This Agreement or
any part hereof may be changed or waived
5
only by an instrument in writing signed by the party against which enforcement
of such change or waiver is sought.
ARTICLE 13. Assignment. This Agreement shall not be assignable by either
party without the prior written consent of the other party.
ARTICLE 14. Agreement for Sole Benefit of the Sub-Administrator and the
Administrator. This Agreement is for the sole and exclusive benefit of the
Sub-Administrator and the Administrator and will not be deemed to be for the
direct or indirect benefit of the clients or customers of the Sub-Administrator
or the Administrator. The clients or customers of the Sub-Administrator or the
Administrator will not be deemed to be third party beneficiaries of this
Agreement nor to have any other contractual relationship with the
Sub-Administrator by reason of this Agreement and each party hereto agrees to
indemnify and hold harmless the other party from any claims of its clients or
customers against the other party including any attendant expenses and
attorneys' fees, based on this Agreement or the services provided hereunder.
ARTICLE 15. Waiver. Any term or provision of this Agreement may be waived
at any time by the party entitled to the benefit thereof by written instrument
executed by such party. No failure of either party hereto to exercise any power
or right granted hereunder, or to insist upon strict compliance with any
obligation hereunder, and no custom or practice of the parties with regard to
the terms of performance hereof, will constitute a waiver of the rights of such
party to demand full and exact compliance with the terms of this Agreement.
ARTICLE 16. Notice. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if sent by registered or certified
mail, federal express (or substantially similar delivery service), postage
prepaid, addressed by the party giving notice to the other party at the last
address furnished by the other party to the party giving notice: if to the
Administrator at: Attention: Fund Administration, Xxx Xxxxxxx Xxxxx, Xxxxxxxxx,
XX 00000; and if to the Sub-Administrator, Attention: General Counsel, Xxx
Xxxxxxx Xxxxxx Xxxxx, Xxxx, Xxxxxxxxxxxx, 00000.
ARTICLE 17. Force Majeure. No breach of any obligation of a party to this
Agreement will constitute an event of default or breach to the extent it arises
out of a cause, existing or future, that is beyond the reasonable control and
without negligence of the party otherwise chargeable with breach or default,
including without limitation: work action or strike; lockout or other labor
dispute; flood; war; riot; theft; earthquake or natural disaster. Either party
desiring to rely upon any of the foregoing as an excuse for default or breach
will, when the cause arises, give to the other party prompt notice of the facts
which constitute such cause; and, when the cause ceases to exist, give prompt
notice thereof to the other party.
ARTICLE 18. Equipment Failures and Business Continuity and Disaster
Recovery Plan. The Sub-Administrator shall develop and maintain a plan for
recovery from equipment failures which may include contractual arrangements with
appropriate parties making reasonable provision for emergency use of electronic
data processing equipment and shall seek to reasonably ensure that the
appropriate equipment is available. The Sub-Administrator shall maintain
adequate and reliable computer and other equipment necessary or appropriate to
carry out its obligations under this
6
Agreement. Upon the Administrator's reasonable request, the Sub-Administrator
shall provide supplemental information concerning aspects of the disaster
recovery and business continuity plan that are relevant to the services provided
hereunder. In the event of equipment failures beyond the Sub-Administrator's
reasonable control, the Sub-Administrator shall take commercially reasonable and
prompt steps to minimize service interruptions and shall follow applicable
procedures in its disaster recovery and business continuity plan and use all
commercially reasonable efforts to minimize service interruptions but shall have
no liability for any damage, loss of data, delay or any other loss whatsoever
caused by events beyond its reasonable control.
ARTICLE 19. Definitions of Certain Terms. The term "affiliated person,"
when used in this Agreement, shall have the meaning specified in the 1940 Act
and the rules and regulations thereunder, subject to such exemptions as may be
granted by the Securities and Exchange Commission.
ARTICLE 20. Headings. All Article headings contained in this Agreement are
for convenience of reference only, do not form a part of this Agreement and will
not affect in any way the meaning or interpretation of this Agreement. Words
used herein, regardless of the number and gender specifically used, will be
deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine, or neuter, as the contract requires.
ARTICLE 21. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Delaware without giving effect to the conflicts of
laws principles therof, and the applicable provisions of the 1940 Act. To the
extent that the applicable laws of the State of Delaware, or any of the
provisions herein, conflict with the applicable provisions of the 1940 Act, the
latter shall control.
ARTICLE 22. Multiple Originals. This Agreement may be executed in two or
more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
ARTICLE 23. Binding Agreement. This Agreement, and the rights and
obligations of the parties hereunder, shall be binding on, and inure to the
benefit of, the parties and their respective successors and assigns.
ARTICLE 24. Severability. If any part, term or provision of this Agreement
is held to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be affected,
and the rights and obligations of the parties shall be construed and enforced as
if the Agreement did not contain the particular part, term or provision held to
be illegal or invalid.
7
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
MERCANTILE CAPTIAL ADVISORS, INC.
By:/s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
SEI INVESTMENTS GLOBAL FUNDS SERVICES
By:/s/ Xxxx Xxxxx
-------------------------------
Name: Xxxx Xxxxx
Title: Vice President
8
SCHEDULE A
LIST OF SERVICES
1. DESCRIPTION OF ACCOUNTING SERVICES ON A CONTINUOUS BASIS.
The Sub-Administrator will perform the following accounting services with
respect to each portfolio:
(i) Journalize investment, capital and income and expense activities;
(ii) Receive investment activity for hedge fund-of-fund investments from
investment adviser in written form and facilitate notification and
wire movement process to such funds;
(iii) Receive buy/sell trade tickets from the Advisers, process the
activity on the books and records of the Funds and reconcile such
activity with each Fund's custodian;
(iv) Maintain individual ledgers for each investment fund in which the
Funds are invested and use valuations provided by the underlying
funds in which the Funds are invested or as reported by the
Advisers;
(v) Maintain historical tax lots for each security;
(vi) Record and reconcile corporate action activity and all other capital
changes;
(vii) Reconcile cash and investment balances of each Fund with each Fund's
custodian(s), and provide the Advisers with the beginning cash
balance available for investment purposes;
(viii)Calculate contractual expenses, including management fees and
incentive fee, as applicable, in accordance with each Fund's
confidential memorandum;
(ix) Post to and prepare the Statement of Assets and Liabilities and the
Statement of Operations in U.S. dollar terms;
(x) Monitor the expense accruals and notify the Administrator of any
proposed adjustments;
(xi) Control all disbursements and authorize such disbursements from each
Fund's account with the custodian(s) upon written instructions from
Manager or any other person duly authorized by the Manager to give
such instructions on behalf of the Funds;
9
(xii) Calculate capital gains and losses;
(xiii) Determine net income;
(xiv) Determine applicable foreign exchange gains and losses on payables
and receivables, if applicable;
(xv) Transmit or mail copy of the monthly portfolio valuation to the
Adviser;
(xvi) Arrange for the computation of the net asset value in accordance
with the provisions of each Fund's LLC Agreement and prospectus; and
(xvii) As appropriate, compute total return and expenses.
(xviii) Maintain records and other information necessary on a book basis to
facilitate the preparation of each Fund's tax returns and tax
information reports to the Members by the audit firm.
2. DESCRIPTION OF ADMINISTRATION SERVICES ON A CONTINUOUS BASIS.
The Sub-Administrator will perform the following administration services if
required with respect to each portfolio:
(i) Prepare monthly security transaction listings;
(ii) Supply various normal and customary fund statistical data as
requested on an ongoing basis;
(iii) Prepare and file each Fund's Annual and Semi-Annual Reports with the
SEC on Form N-SAR via XXXXX;
(iv) Coordinate with the Administrator with respect to the printing and
mailing of each Fund's annual and semi-annual shareholder reports;
and
(v) Provide such fund accounting and financial reports in connection
with quarterly meetings of the Board of Directors as are required or
as the Board may reasonably request;
(vi) Manage the tender offer process, including distribute tender offers,
track Member responses and tabulate tender offer results;
(vii) Provide individuals to serve as officers of the Funds, as requested;
10
(viii) Coordinate with the Funds' counsel on reviewing and filing
registration statements and tender offers, and coordinate printing
and delivery of prospectus and tender offers;
(ix) Coordinate the Funds' Board of Director's schedule, agenda and
production of Board meeting materials, and attend Board meetings (if
requested);
(x) Coordinate the preparation, review and execution of contracts
between the Funds and third parties;
(xi) Coordinate as necessary the registration or qualification of
Interests of each Fund with appropriate state securities
authorities.
(xii) Provide compliance services for the Funds as follows:
a) Provide back-end, quantitative compliance testing as mutually
agreed to by the Administrator and Sub-Administrator from time
to time; provided, however, that the Administrator
acknowledges that the sub-advisers are responsible for
ensuring the Funds' compliance with the 1940 Act and the
investment policies and restrictions listed in the Funds'
prospectuses;
b) Research and report compliance exceptions to such persons as
the Administrator directs;
c) Collect and report to the Administrator and the Board on a
quarterly basis information related to transactions reportable
under the 1940 Act and Fund procedures;
d) Provide 1940 Act portfolio compliance training for the Funds'
investment advisers and compliance personnel once a year at
the Sub-Administrator's headquarters or such other place as
the parties may agree.
(xiii) Provide anti-money laundering compliance and recordkeeping services
for the Funds as required by the Funds' Anti-Money Laundering
("AML") Program and applicable regulatory requirements. These
services include:
(a) Verify Member identity upon opening new accounts in accordance
with Section 326 of the Act and any regulations thereunder.
(b) Monitor Member transactions and identify and report suspicious
activities that are required to be so identified and reported,
in each case consistent with the Funds' AML Programs.
11
(c) Submit all financial transactions through the Office of
Foreign Asset Control ("OFAC") database and FinCEN's (formerly
the Securities and Exchange Commission's) Control List.
(d) Follow the Funds' third party check policies. Under no
circumstance will SEI or its designee accept a corporate third
party check.
(c) Place holds on transactions in Member accounts or freeze
assets in Member accounts, as provided in the Funds' AML
Programs and in accordance with the Act and OFAC, subject to
the provisions of this Amendment.
(d) Maintain all records or other documentation related to Member
accounts and transactions therein that are required to be
prepared and maintained pursuant to the Funds' AML Programs,
and make the same available for inspection by (i) the Funds'
AML Compliance Officer, (ii) any auditor of the Funds' AML
Program or related procedures, policies or controls that has
been designated by the Funds in writing, or (iii) regulatory
or law enforcement authorities, and otherwise make said
records or other documents available at the direction of the
Funds' AML Compliance Officer.
(e) Perform such other related services as may be required by
applicable law as to the Funds' AML Programs.
(xiv) Perform such additional administrative duties relating to the
administration of the Funds as may subsequently be agreed upon in
writing between the Administrator and the Sub-Administrator.
3. DESCRIPTION OF INVESTOR SERVICES ON A CONTINUOUS BASIS.
The Sub-Administrator will perform the following functions:
(i) Maintain the register of Members and enter on such register all
issues, transfers and repurchases of interests in each Fund;
(ii) Arrange for the calculation of the issue and repurchase prices of
interests in each Fund in accordance with the Fund's LLC Agreement;
(iii) Allocate income, expenses, gains and losses to individual Members'
capital accounts in accordance with each Fund's LLC Agreement;
(iv) Calculate the Incentive Allocation in accordance with each Fund's
LLC Agreement and reallocate corresponding amounts from the
applicable Members' accounts to the Adviser's account; and
12
(v) Coordinate the annual mailing of Form K-1 prepared by the audit firm
to each Member in accordance with applicable tax regulations.
(vi) Provide statements to Members on a monthly basis or as frequently as
may otherwise be agreed that set forth the value of and appropriate
detail for the Members' Interests in each Fund
[END OF SCHEDULE A]
13
SCHEDULE B
Fees & EXPENSES
Administration, Accounting Services and Investor Servicing Fee (Monthly
Valuation):
Asset Based Fees - calculated on the net assets of the Fund
----------------------------------------
ASSET LEVEL PER FUND
----------------------------------------
FIRST $500 XXXXXXX 00 XX
----------------------------------------
EXCESS OF $500 MILLION 8 BP
----------------------------------------
Annual Minimum Fees - calculated monthly and paid quarterly
----------------------------------------
PER FUND
----------------------------------------
MINIMUM $60,000
----------------------------------------
INVESTOR SERVICING FEE: Annual charge of $20,000 per Fund (1/4th payable each
quarter), plus:
o $40 annual per investor account charge
o $25 per new investor set up charge (one-time),
plus
o $12 per investor transaction
OTHER: All reasonable out of pocket expenses (i.e., blue sky
fees, fulfillment charges, pricing service fees,
postage, independent board members, registration fees,
facsimile and telephone charges) incurred by the
Sub-Administrator on behalf of the Fund(s) would be
billed to the Fund(s) quarterly in arrears.
TERM: This Agreement shall become effective on January 1,
2003 and shall remain in effect through December 31,
2005 "Initial Term") and, thereafter, for successive
terms of 1 year each (each a "Renewal Term"), unless
and until this Agreement is terminated in accordance
with the provisions of Article 6 hereof.
[END OF SCHEDULE B]
14
