Exhibit (k)(4)
FORM OF INVESTOR SERVICES AGREEMENT
THIS AGREEMENT is made as of June 26, 2002 by and between DB HEDGE STRATEGIES
FUND LLC, a Delaware limited liability company (the "Fund"), and PFPC INC., a
Massachusetts corporation ("PFPC").
WITNESSETH:
WHEREAS, the Fund is registered as a closed-end, non-diversified management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act") and wishes to retain PFPC to provide certain investor services
provided for herein, and PFPC wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. DEFINITIONS. As used in this Agreement.
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any other person
duly authorized by the Fund's directors to give Oral Instructions and Written
Instructions on behalf of the Fund or any person reasonably believed by PFPC to
be so authorized. An Authorized Person's scope of authority may be limited by
setting forth such limitation in a written document signed by both parties
hereto.
(d) "CEA" means the Commodities Exchange Act, as amended.
(e) "Member" shall have the same meaning given such term in the Operating
Agreement (as hereinafter defined).
(f) "Oral Instructions" mean oral instructions received by PFPC from an
Authorized Person or from a person reasonably believed by PFPC to be an
Authorized Person. PFPC may, in its sole discretion in each separate instance,
consider and rely upon instructions it receives from an Authorized Person via
electronic mail as Oral Instructions.
(g) "Organizational Documents" means the Fund's charter or articles of
incorporation, limited liability company operating agreement ("Operating
Agreement"), bylaws, prospectus, and other documents constituting the Fund, each
as may be amended.
(h) "SEC" means the Securities and Exchange Commission.
(i) "Securities Laws" means the 1933 Act, the 1934 Act, the 1940 Act, and
the CEA.
(j) "Written Instructions" means
(i) written instructions signed by an Authorized Person and
received by PFPC or
(ii) trade instructions transmitted (and received by PFPC) by means
of an electronic transaction reporting system, access to which
requires use of a password or other authorized identifier.
The instructions may be delivered by hand, mail, tested telegram,
cable, telex, or facsimile sending device.
2. APPOINTMENT. The Fund hereby appoints PFPC to provide investor services to
the Fund, in accordance with the terms set forth in this Agreement. PFPC accepts
such appointment and agrees to furnish such services to the Fund in accordance
with the terms set forth in this Agreement.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where applicable, will
provide PFPC with the following:
(a) certified or authenticated copies of the resolutions of the Fund's
directors, approving the appointment of PFPC or its affiliates to provide
services and approving this Agreement;
(b) a copy of the Fund's most recent effective registration statement on
Form N-2 under the 1940 Act, as filed with the SEC;
(c) a copy of all of the Fund's Organizational Documents;
(d) a copy of any investment management agreement with respect to the Fund;
(e) a copy of any distribution agreement with respect to the Fund;
(f) a copy of any additional administration agreement with respect to the
Fund;
(g) a copy of any investor servicing agreement made with respect to the
Fund; and
(h) copies (certified or authenticated, where applicable) of any and all
amendments or supplements to the foregoing.
4. COMPLIANCE WITH RULES AND REGULATIONS. PFPC undertakes to comply with the
applicable requirements of the Securities Laws, and any laws, rules, and
regulations of governmental authorities having jurisdiction with respect to the
duties to be performed by PFPC hereunder as are specified in writing by the Fund
to PFPC and agreed in writing by PFPC. Except as specifically set forth herein,
PFPC assumes no responsibility for such compliance by the Fund.
- 2 -
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC shall act only upon
Oral Instructions or Written Instructions.
(b) PFPC shall be entitled to rely upon any Oral Instructions or Written
Instructions it receives from an Authorized Person pursuant to this Agreement.
PFPC may assume that any Oral Instruction or Written Instruction received
hereunder is not in any way inconsistent with the provisions of the
Organizational Documents or this Agreement or of any vote, resolution, or
proceeding of the Fund's directors or Members, unless and until PFPC receives
Written Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Written Instructions confirming Oral
Instructions (except where such Oral Instructions are given by PFPC or its
affiliates) so that PFPC receives the Written Instructions as promptly as
practicable and in any event by the close of business on the day after such Oral
Instructions are received. The fact that such confirming Written Instructions
are not received by PFPC or differ from the Oral Instructions shall in no way
invalidate the transactions or enforceability of the transactions authorized by
the Oral Instructions or PFPC's ability to rely upon such Oral Instructions.
Where Oral Instructions or Written Instructions reasonably appear to have been
received from an Authorized Person, PFPC shall incur no liability to the Fund in
acting upon such Oral Instructions or Written Instructions provided that PFPC's
actions comply with the other provisions of this Agreement.
6. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF THE FUND. If PFPC is in doubt as to any action it should or
should not take, PFPC may request directions or advice, including Oral
Instructions or Written Instructions, from the Fund.
(b) ADVICE OF COUNSEL. If PFPC shall be in doubt as to any question of law
pertaining to any action it should or should not take, PFPC may request advice
from counsel of its own choosing (who may be counsel for the Fund, the Fund's
investment adviser, or PFPC, at the option of PFPC) provided, however, that the
Fund will be responsible only for reasonable legal expenses incurred in
connection therewith.
(c) CONFLICTING ADVICE. In the event of a conflict between directions or
advice, or Oral Instructions or Written Instructions PFPC receives from the
Fund, and the advice PFPC receives from counsel, PFPC may rely upon and follow
the advice of counsel. PFPC shall promptly inform the Fund of such conflict, and
PFPC shall refrain from acting in the event of a conflict, unless counsel
advises PFPC that failure to take action is likely to result in additional loss,
liability, or expense. In the event PFPC relies on the advice of counsel, PFPC
remains liable for any action or omission on the part of PFPC that constitutes
willful misfeasance, bad faith, gross negligence, or reckless disregard by PFPC
of any duties, obligations, or responsibilities set forth in this Agreement.
(d) PROTECTION OF PFPC. PFPC shall be protected and indemnified by the Fund
in any action PFPC takes or does not take in reliance upon directions, advice,
or Oral Instructions or Written Instructions PFPC receives from or on behalf of
the Fund or from counsel and that PFPC
- 3 -
believes, in good faith, to be consistent with those directions, advice, and
Oral Instructions or Written Instructions. Nothing in this section shall be
construed so as to impose an obligation upon PFPC:
(i) to seek such directions, advice, or Oral Instructions or
Written Instructions, or
(ii) to act in accordance with such directions, advice, or Oral
Instructions or Written Instructions unless, under the terms
of other provisions of this Agreement, the same is a condition
of PFPC's properly taking or not taking such action. Nothing
in this subsection shall excuse PFPC when an action or
omission on the part of PFPC constitutes willful misfeasance,
bad faith, gross negligence, or reckless disregard by PFPC of
any duties, obligations, or responsibilities set forth in this
Agreement.
7. RECORDS; VISITS.
(a) The books and records pertaining to the Fund, which are in the
possession or under the control of PFPC, shall be the property of the Fund. Such
books and records shall be prepared and maintained as required by the 1940 Act
and other applicable Securities Laws, rules, and regulations. The Fund,
Authorized Persons, and the staff of the SEC shall have access to such books and
records at all times during PFPC's normal business hours. Upon the reasonable
request of the Fund, copies of any such books and records shall be provided by
PFPC to the Fund or to an Authorized Person, at the Fund's expense. Any such
books and records may be maintained in the form of electronic media and stored
on any magnetic disk or tape or similar recording method. No records will be
destroyed without the Fund's written consent.
(b) PFPC shall keep the following records:
(i) all books and records with respect to the Fund's books of
account; and
(ii) records of the Fund's securities transactions.
(c) To the extent required by, and in the manner prescribed by and in
accordance with, the 1940 Act, the books and records of PFPC pertaining to its
actions under this Agreement and reports by PFPC or its independent accountants
concerning its accounting system, procedures for safeguarding securities, and
internal accounting controls will be open to inspection and audit at reasonable
times by officers, employees, or agents of the Fund or auditors employed by the
Fund and will be preserved by PFPC.
8. CONFIDENTIALITY. Each party shall keep confidential any information
relating to the other party's business ("Confidential Information").
(a) Confidential Information shall include:
(i) any data or information that is competitively sensitive
material, and not publicly available, including, but not
limited to, information about product plans, marketing
strategies, finances, operations, customer relationships,
customer
- 4 -
profiles, customer lists, sales estimates, business
plans, and internal performance results relating to the past,
present, or future business activities of the Fund or PFPC,
their respective subsidiaries, and affiliated companies and
the customers, clients, and suppliers of any of them;
(ii) any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially
valuable and secret in the sense that its confidentiality
affords the Fund or PFPC a competitive advantage over its
competitors;
(iii) all confidential or proprietary concepts, documentation,
reports, data, specifications, computer software, source code,
object code, flow charts, databases, inventions, know-how, and
trade secrets, whether or not patentable or copyrightable; and
(iv) anything designated as confidential.
(b) Notwithstanding the foregoing, information shall not be subject to such
confidentiality obligations if it:
(i) is already known to the receiving party at the time it is
obtained other than as a result of disclosure by the other
party;
(ii) is or becomes publicly known or available through no wrongful
act of the receiving party;
(iii) is rightfully received from a third party who, to the best of
the receiving party's knowledge, is not under a duty of
confidentiality;
(iv) is released by the protected party to a third party without
restriction;
(v) is required to be disclosed by the receiving party pursuant to
a requirement of a court order, subpoena, governmental or
regulatory agency, or law (provided the receiving party will
provide the other party written notice of such requirement, to
the extent such notice is permitted);
(vi) is relevant to the defense of any claim or cause of action
asserted against the receiving party; or
(vii) has been or is independently developed or obtained by the
receiving party.
(c) If any party to this agreement or any of such party's affiliates or
their respective employees, officers, agents, or representatives (hereinafter,
"Qualified Persons") is requested or required (by oral question,
interrogatories, requests for information or documents, subpoena, civil
investigative demand, or similar process) to disclose any Confidential
Information, such party, on its own behalf or on behalf of such party's
Qualified Person, will promptly notify such other party of such request or
requirement so that such other party may seek an appropriate protective order or
waive compliance with provisions of this Agreement. If, in the absence of a
- 5 -
protective order or the receipt of a waiver hereunder, such party or such
party's Qualified Person subject to the disclosure request or requirement is, in
the written opinion of such party's counsel addressed to such other party (the
reasonable fees for which shall be paid by such other party), compelled to
disclose the Confidential Information or else stand liable for contempt or
suffer other censure or significant penalty, such party or such party's
Qualified Person subject to the disclosure request or requirement may disclose
only such of the Confidential Information to the party compelling disclosure as
is required by law. Any party that discloses Confidential Information pursuant
to the foregoing sentence shall not be liable for the disclosure of such
Confidential Information to the other party unless such disclosure was caused by
such party's or such party's Qualified Person's action or inaction that (i)
constitutes willful misfeasance, bad faith, gross negligence, or reckless
disregard of their duties hereunder or (ii) is not otherwise permitted by this
Agreement.
9. LIAISON WITH ACCOUNTANTS. PFPC shall act as liaison with the Fund's
independent public accountants and shall provide account analyses, fiscal year
summaries, and other audit-related schedules with respect to the Fund. PFPC
shall take all reasonable action in the performance of its duties under this
Agreement to assure that the necessary information is made available to such
accountants in a timely manner for the expression of their opinion as to the
financial statements of the Fund or as may otherwise be required by the
Securities Laws or the Fund.
10. PFPC SYSTEM. PFPC shall retain title to and ownership of any and all
database technology, computer programs, screen formats, report formats,
interactive design techniques, derivative works, inventions, discoveries,
patentable or copyrightable matters, concepts, expertise, patents, copyrights,
trade secrets, and other related legal rights utilized by PFPC in connection
with the services provided by PFPC to the Fund.
11. DISASTER RECOVERY. PFPC shall enter into and shall maintain in effect with
appropriate parties one or more agreements making reasonable provisions for
emergency use of electronic data processing equipment, including the maintenance
of an offsite disaster recovery site from which PFPC can meet its obligations
hereunder in the event that its primary facility is unavailable. In the event of
equipment failures, PFPC shall, at no additional expense to the Fund, take
reasonable steps to minimize service interruptions. PFPC shall have no liability
with respect to the loss of data or service interruptions caused by equipment
failure, provided such loss or interruption is not caused by PFPC's own willful
misfeasance, bad faith, gross negligence, or reckless disregard of its duties or
obligations under this Agreement.
12. COMPENSATION. As compensation for services set forth herein that are
rendered by PFPC during the term of this Agreement, the Fund will pay to PFPC a
fee or fees as may be agreed to in writing by the Fund and PFPC.
13. INDEMNIFICATION. Each party agrees to indemnify and hold harmless the other
party and its affiliates, including their respective officers, directors,
agents, and employees, from all taxes, charges, expenses, assessments, claims,
and liabilities (including, without limitation, reasonable attorneys fees and
disbursements and liabilities arising under the Securities Laws and any state
and foreign securities and blue sky laws) arising directly or indirectly from
any action or omission to act by that party in connection with this Agreement.
Neither party, nor any of its affiliates, shall be indemnified against any
liability (or any expenses incident to such liability)
- 6 -
caused by such party's or its affiliates' own willful misfeasance, bad faith,
gross negligence, or reckless disregard in the performance of its duties under
this Agreement. The provisions of this Section 13 shall survive termination of
this Agreement.
14. RESPONSIBILITY OF PFPC.
(a) PFPC shall be under no duty to take any action on behalf of the Fund
except as reasonably necessary to fulfill its duties set forth herein or as may
be specifically agreed to by PFPC and the Fund in a written amendment hereto.
PFPC shall be obligated to exercise care and diligence in the performance of its
duties hereunder and to act in good faith in performing services provided for
under this Agreement. PFPC shall be liable only for any damages arising out of
PFPC's failure to perform its duties under this Agreement to the extent such
damages arise out of PFPC's willful misfeasance, bad faith, gross negligence, or
reckless disregard of such duties.
(b) Notwithstanding anything in this Agreement to the contrary,
(i) PFPC shall not be liable for losses, delays, failure, errors,
interruption, or loss of data occurring directly or indirectly
by reason of circumstances beyond its reasonable control,
including without limitation acts of God; action or inaction
of civil or military authority; public enemy; war; terrorism;
riot; fire; flood; sabotage; epidemics; labor disputes; civil
commotion; interruption, loss, or malfunction of utilities,
transportation, computer, or communications capabilities;
insurrection; elements of nature; or non-performance by a
third party; and
(ii) PFPC shall not be under any duty or obligation to inquire into
and shall not be liable for the validity or invalidity,
authority or lack thereof, or truthfulness or accuracy or lack
thereof, of any instruction, direction, notice, instrument, or
other information that conforms to the applicable requirements
of this Agreement and that PFPC reasonably believes to be
genuine.
(c) Notwithstanding anything in this Agreement (whether contained anywhere
in Sections 15-17 hereof or otherwise) to the contrary, Fund hereby acknowledges
and agrees that
(i) PFPC, in the course of providing tax-related services or
calculating and reporting portfolio performance hereunder, may
rely upon PFPC's interpretation of tax positions or its
interpretation of relevant circumstances (as determined by
PFPC) in providing such tax services and in determining
methods of calculating portfolio performance to be used,
provided that such interpretations and determinations are made
in good faith and subject to review by the Fund's tax adviser,
and
(ii) PFPC shall not be liable for losses or damages of any kind
associated with such reliance except to the extent such loss
or damage is substantially due to PFPC's bad faith, gross
negligence, willful misfeasance, or reckless disregard of its
duties.
- 7 -
(d) Notwithstanding anything in this Agreement to the contrary, without
limiting anything in the immediately preceding sentence, the Fund hereby
acknowledges and agrees that PFPC shall not be liable for any losses or damages
of any kind associated with any tax filings with which PFPC has assisted in any
way except to the extent such loss or damage is substantially due to PFPC's bad
faith, gross negligence, willful misfeasance or reckless disregard of its
duties, at the time of such assistance;
(e) Notwithstanding anything in this Agreement to the contrary, neither
PFPC nor its affiliates shall be liable for any consequential, special, or
indirect losses or damages, whether or not the likelihood of such losses or
damages was known by PFPC or its affiliates. PFPC's cumulative liability to the
Fund for all losses, claims, suits, controversies, breaches, or damages for any
cause whatsoever (including but not limited to those arising out of or related
to this Agreement) and regardless of the form of action or legal theory shall
not exceed the lesser of $200,000 or the fees received by PFPC for services
provided hereunder during the 24 months immediately prior to the date of such
loss or damage.
(f) Any cause of action asserted by the Fund against PFPC or any of its
affiliates must be asserted within the 12 month period after the Fund has actual
knowledge of such cause of action.
(g) Each party shall have a duty to mitigate damages for which the other
party may become responsible.
(h) The provisions of this Section 14 shall survive termination of this
Agreement.
15. DESCRIPTION OF INVESTOR SERVICES ON A CONTINUOUS BASIS. PFPC will perform
the following functions:
(a) Maintain the register of Members of the Fund and enter on such register
all issues, transfers, and repurchases of units in the Fund;
(b) Calculate monthly the issue and repurchase prices of units in the Fund
in accordance with the Operating Agreement;
(c) Allocate income, expenses, gains, and losses to individual Member's
capital accounts in accordance with the Fund's Operating Agreement;
(d) Calculate the Incentive Allocation, if applicable, in accordance with
the Operating Agreement and Prospectus and reallocate corresponding amounts from
the applicable Members' capital accounts to the board of directors' capital
account;
(e) Prepare and mail annually to Members any required Form K-1 in
accordance with applicable tax regulations;
(f) Prepare tax return for federal, state, and other required income tax
returns;
(g) Prepare and distribute estimated interim tax reports once per year
before April 15 of the following year;
- 8 -
(h) Coordinate with fulfillment contractor the mailing of prospectuses and
subscription documents;
(i) Process direct payments and wires; and
(j) Confirm account activity.
16. DURATION AND TERMINATION. This Agreement shall continue until terminated by
the Fund or by PFPC on sixty (60) days' prior written notice to the other party.
In the event the Fund gives notice of termination, all reasonable expenses
associated with movement (or duplication) of records and materials and
conversion thereof to a successor service provider (or each successive service
provider, if there are more than one), and all trailing expenses incurred by
PFPC, will be borne by the Fund.
17. NOTICES. Notices shall be addressed
(a) if to PFPC, at 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000,
Attention: President;
(b) if to the Fund, at c/o DB Absolute Return Strategies, 00 XxXxxxxx
Xxxxxx, Xxxxxx XX 00000, Attention: Xxxx Xxxxxxxx; or
(c) if to neither of the foregoing, at such other address as shall have
been given by like notice to the sender of any such notice or other
communication by the other party.
If notice is sent by confirming telegram, cable, telex, or facsimile sending
device, it shall be deemed to have been given immediately. If notice is sent by
first-class mail, it shall be deemed to have been given three days after it has
been mailed. If notice is sent by messenger, it shall be deemed to have been
given on the day it is delivered.
18. AMENDMENTS. This Agreement, or any term thereof, may be changed or waived
only by written amendment, signed by the party against whom enforcement of such
change or waiver is sought.
19. ASSIGNMENT. PFPC may assign its rights hereunder to any majority-owned
direct or indirect subsidiary of PFPC or of The PNC Financial Services Group,
Inc., provided that (i) PFPC gives the Fund 60 days' prior written notice of
such assignment; (ii) the assignee or delegate agrees to comply with the
relevant provisions of the Securities Laws; and (iii) PFPC and such assignee or
delegate promptly provide such information as the Fund may request, and respond
to such questions as the Fund may ask, relative to the assignment or delegation,
including, without limitation, the capabilities of the assignee or delegatee.
Except as stated above, this Agreement may not be assigned or delegated by any
party without the written consent of each party.
20. COUNTERPARTS. This Agreement may be executed 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.
- 9 -
21. FURTHER ACTIONS. Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
22. MISCELLANEOUS.
(a) Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, provided that the parties
may embody in one or more separate documents their agreement, if any, with
respect to delegated duties.
(b) No Changes that Materially Affect Obligations. Notwithstanding anything
in this Agreement to the contrary, the Fund agrees to provide PFPC with prior
notice sufficient for PFPC to evaluate the impact of any modifications to its
registration statement or the adoption of any policies that would affect
materially the obligations or responsibilities of PFPC hereunder.
(c) Captions. 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.
(d) Governing Law. This Agreement shall be deemed to be a contract made in
Delaware and governed by Delaware law without regard to principles of conflict
of law.
(e) Partial Invalidity. 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 affected thereby.
(f) Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
(g) No Representations or Warranties. Except as expressly provided in this
Agreement, PFPC hereby disclaims all representations and warranties, express or
implied, made to the Fund or any other person, including, without limitation,
any warranties regarding quality, suitability, merchantability, fitness for a
particular purpose, or otherwise (irrespective of any course of dealing, custom,
or usage of trade), of any services or any goods provided incidental to services
provided under this Agreement. PFPC disclaims any warranty of title or
non-infringement except as otherwise set forth in this Agreement.
(h) Facsimile Signatures. The facsimile signature of any party to this
Agreement shall constitute the valid and binding execution hereof by such party.
(i) No Third Party Beneficiaries. Except as expressly set forth herein, no
provision hereof is intended to benefit the Fund or any other third party.
- 10 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first above written.
--------------------------------------------------
Xxxx Xxxxxxx
Senior Vice President and Senior Managing Director
--------------------------------------------------
Xxxxxxx Xxxxxxxxx
Vice President
- 11 -
