FORM OF ADMINISTRATION AGREEMENT
AGREEMENT, made as of the ____ day of __________, 2002, by and between the
DB Hedge Strategies Fund LLC, a Delaware limited liability company (the "Fund")
and DB Investment Managers, Inc., a Delaware corporation (the "Administrator").
WHEREAS, the Fund is a closed-end, management investment company,
registered under the Investment Company Act of 1940, as amended (the "1940 Act")
and the Administrator is an investment adviser registered under the Investment
Advisers Act of 1940, as amended; and
WHEREAS, the Fund desires the Administrator to render administrative
services to the Fund, and the Administrator is willing to render such services
upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises, the parties hereto agree
as follows:
1. Appointment. The Fund hereby appoints the Administrator to provide the
services set forth below, subject to the overall supervision of the Board
of Directors of the Fund, for the period and on the terms set forth in this
Agreement. The Administrator hereby accepts such appointment and agrees
during such period to render the services herein described and to assume
the obligations set forth herein, for the compensation herein provided.
2. Administrative Services. Subject to the general supervision of the Board of
Directors of the Fund, the Administrator will, at its own expense:
(i) furnish to the Fund the services of its employees and agents in
the management and conduct of the corporate business and affairs of
the Fund;
(ii) supervise and manage all aspects of the Fund's operations other
than portfolio management and distribution, as such services are
described in the Fund's Investment Management Agreement and
Underwriting and Distribution Services Agreement, respectively;
(iii) provide the Fund with such executive, administrative,
accounting, clerical and bookkeeping services as are deemed advisable
by the Funds Board of Directors;
(iv) provide the Fund with, or obtain for it, adequate office space
and all necessary office equipment and services including telephone
service, heat, utilities, stationery, supplies and similar items for
any offices as are deemed advisable by the Fund's Board of Directors;
(v) monitor and review the Fund's contracted services and
expenditures, including the services provided under the
Sub-Administration Agreement and services provided by the independent
auditors and legal counsel;
(vi) provide the Fund with such administrative and clerical services
for the maintenance of certain Member records as are deemed advisable
by the Fund's Board of Directors;
(vii) provide the Fund with, or obtain for it, such appropriate
transfer agency services and services related to payment of
distributions as are deemed advisable by the Fund's Board of
Directors;
(viii) provide the Fund with, or obtain for it, such appropriate fund
accounting services as are deemed advisable by the Fund's Board of
Directors;
(ix) prepare or supervise the preparation of periodic reports to the
Fund's Members and prepare and file, with such advice of counsel as
reasonably deemed necessary by the Administrator, such documents and
other papers as may be required to comply with the rules, regulations
and requirements of the Securities and Exchange Commission ("SEC") and
other appropriate governmental agencies, whether state or federal;
(x) supervise regulatory compliance matters, including, but not
limited to, the compilation of information for reports to, and filings
with, the SEC and other appropriate governmental agencies, whether
state or federal; and
(xi) report to the Board of Directors of the Fund concerning its
activities pursuant to this Agreement at regular meetings of the Board
and at such other times as the Board may reasonably request.
3. Allocation of Charges and Expenses. Each party shall bear all expenses of
its employees and overhead incurred by it in connection with its duties
under this Agreement. The Administrator will pay the compensation and
expenses of all of its personnel and will make available, without expense
to the Fund, the services of such of its partners, officers and employees
as may duly be elected officers or Directors of the Fund, subject to their
individual consent to serve and to any limitations imposed by law. The
Administrator will not be required to pay any expenses of the Fund other
than those specifically allocated to the Administrator in Sections 2, 3 and
6. In particular, but without limiting the generality of the foregoing, the
Administrator will not be required to pay: (i) fees and expenses of any
investment adviser of the Fund; (ii) organizational expenses of the Fund;
(iii) fees and expenses incurred by the Fund in connection with membership
in investment company organizations; (iv) brokers' commissions, transfer
taxes, fees and other expenses connected with the acquisition, disposition
and valuation of securities and other investments; (v) fees and charges for
portfolio pricing services to a pricing agent, if any; (vi) outside legal,
accounting or auditing expenses; (vii) interest, insurance premiums, taxes
or governmental fees; (viii) litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of the
Fund's business; (ix) the cost of preparing stock certificates or any other
expenses, including, without limitation, clerical expenses of issue,
redemption or repurchase of units of interest of the Fund; (x) the expenses
of and fees for registering or qualifying units of interest of the Fund for
sale and of maintaining the registration of the Fund and registering the
Fund as a broker or a dealer, if applicable; (xi) the fees and expenses of
Directors of the Fund who are not "interested persons" of the Fund; (xii)
out-of-pocket travel expenses for all Directors and other expenses incurred
by the Fund in connection with Directors' meetings; (xiii) the cost of
typesetting, printing and distributing reports and notices to Members, the
SEC and other regulatory authorities; (xiv) any direct charges to Members
approved by the Board of Directors of the Fund; or (xv) costs in connection
with annual or special meetings of Members, including proxy material
preparation, printing and mailing. The Administrator shall not be required
to pay expenses of activities that are primarily intended to result in
sales of units of interest of the Fund.
4. Compensation of the Administrator.
(a) For all services to be rendered and payments made as provided in
Sections 2 and 3 hereof, the Fund will pay the Administrator on
the last day of each month a fee at an annual rate equal to a
percentage of the Fund's month-end net assets, including assets
attributable to the investment adviser (or its affiliates) and
before giving effect to any redemptions by the Fund of units of
interest of the Fund as set forth in Appendix A hereto. If this
Agreement shall terminate before the last day of a month,
compensation for that part of the month that this Agreement is in
effect shall be prorated in a manner consistent with the
calculations of the fee as set forth above.
(b) In addition to the foregoing, the Administrator may from time to
time agree not to impose all or a portion of its fee otherwise
payable hereunder (in advance of the time such fee or portion
thereof would otherwise accrue) and/or undertake to pay or
reimburse the Fund for all or a portion of its expenses not
otherwise required to be borne or reimbursed by the
Administrator. Any such fee reduction or undertaking may be
discontinued or modified by the Administrator at any time.
5. Other Interests. It is understood that the Directors and officers of the
Fund and Members of the Fund are or may become interested in the
Administrator as directors, officers, employees, shareholders or otherwise
and that directors, officers, employees and shareholders of the
Administrator are or may become similarly interested in the Fund, and that
the Administrator is or may become interested in the Fund as Member or
otherwise. It is also understood that directors, officers, employees and
shareholders of the Administrator are or may become interested (as
directors, officers, employees, stockholders or otherwise) in other
companies or entities (including, without limitation, other investment
companies) controlling, controlled by or under common control with the
Administrator or which may in the future organize, sponsor or acquire, or
with which it may merge or consolidate, and that the Administrator or its
affiliates may enter into advisory or management or administration
agreements or other contracts or relationships with such other companies or
entities.
6. Sub-Administrators. The Administrator may employ, at its own expense, one
or more sub-administrators (including one or more of the Administrator's
affiliates) from time to time to perform such of the acts and services of
the Administrator and upon such terms and conditions as may be agreed upon
between the Administrator and such sub-administrators.
7. Compliance. The Administrator shall observe and comply with the Fund's
Certificate of Formation of Limited Liability Company, the Limited
Liability Company Operating Agreement, the Fund's Registration Statement,
any and all applicable federal and state securities laws, all lawful
resolutions of the Fund's Board of Directors and other lawful orders and
directions given from time to time by the Directors. All activities engaged
in by the Administrator under this Agreement shall be at all times subject
to the control of and review by the Board of Directors.
8. Books and Records. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Administrator hereby agrees that all records which it
maintains or causes to be maintained for the Fund are the property of the
Fund and further agrees to surrender promptly to the Funds any of such
records upon the Fund's request. The Administrator further agrees to
preserve or cause to be preserved for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1
under the 1940 Act.
9. Limitation of Liability of Administrator and Fund. The 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 a loss resulting from willful misfeasance, bad faith or
gross negligence on its part in the performance of its duties or from
reckless disregard by the Administrator of its obligations and duties under
this Agreement. Any person, even though also employed by the Administrator,
who may be or become an employee of and paid by the Fund shall be deemed,
when acting within the scope of his employment by the Fund, to be acting in
such employment solely for the Fund and not as its employee or agent. It is
understood and expressly stipulated that none of the Directors or Members
of the Fund shall be personally liable hereunder. None of the Directors,
officers, agents or Members of the Fund assume any personal liability for
obligations entered into on behalf of the Fund. All persons dealing with
the Fund must look solely to the property of the Fund for the enforcement
of any claims against the Fund.
10. Name of the Fund. The Fund hereby agrees that in the event that neither
the Administrator nor any of its affiliates acts as the Administrator or
investment adviser to the Fund, the name of the Fund will not be one that
suggests an affiliation with the Administrator or affiliates of the
Administrator.
11. Certain Definitions. The term "interested persons" when used herein shall
have the meaning specified in the Investment Company Act of 1940, as
amended, as now in effect or as hereafter amended subject however, to such
exemptions as may be granted by the SEC by any rule, regulation or order.
12. Duration and Termination of this Agreement. This Agreement shall become
effective on the date hereof. Unless terminated as herein provided, this
Agreement shall remain in full force and effect for two years from the date
hereof and shall continue in full force and effect for successive periods
of one year thereafter, but only so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Board of Directors of the Fund. After its initial term, this Agreement may,
on 60 days' written notice to the other party, be terminated at any time
without the payment of any penalty by the Fund or by the Administrator.
13. Amendment of this Agreement. No provisions of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change,
waiver, discharge or termination is sought.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
15. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect. This Agreement may
be executed simultaneously in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
DB HEDGE STRATEGIES FUND LLC
By: ______________________________
Xxxxxxx X. Xxxx, President
DB INVESTMENT MANAGERS, INC.
By: ______________________________
Xxxxxx X. Xxxxxxxxx, President
Appendix A
SCHEDULE OF FEES
Fund Fee
DB Hedge Strategies Fund LLC 0.25%
