Exhibit (25)(2)(k)(2)
MASTER / FEEDER
AGREEMENT
BETWEEN
GROSVENOR REGISTERED MULTI-STRATEGY FUND (TI 1), LLC
AND
GROSVENOR REGISTERED MULTI-STRATEGY MASTER FUND, LLC
DATED AS OF
DECEMBER 31, 2009
TABLE OF CONTENTS
Page
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ARTICLE I REPRESENTATIONS AND WARRANTIES................................. 1
Sec. 1.1 Feeder Fund.................................................. 1
Sec. 1.2 Master Fund.................................................. 1
ARTICLE II COVENANTS..................................................... 3
Sec. 2.1 Feeder Fund.................................................. 3
Sec. 2.2 Master Fund.................................................. 3
Sec. 2.3 Reasonable Actions........................................... 4
ARTICLE III INDEMNIFICATION.............................................. 4
Sec. 3.1 Feeder Fund.................................................. 4
Sec. 3.2 Master Fund.................................................. 5
ARTICLE IV ADDITIONAL AGREEMENTS......................................... 7
Sec. 4.1 Access to Information........................................ 7
Sec. 4.2 Confidentiality.............................................. 7
Sec. 4.3 Obligations of the Feeder Fund and the Master Fund........... 7
ARTICLE V TERMINATION, AMENDMENT......................................... 8
Sec. 5.1 Termination.................................................. 8
Sec. 5.2 Amendment.................................................... 8
ARTICLE VI GENERAL PROVISIONS............................................ 8
Sec. 6.1 Expenses..................................................... 8
Sec. 6.2 Headings..................................................... 8
Sec. 6.3 Entire Agreement............................................. 8
Sec. 6.4 Successors................................................... 8
Sec. 6.5 Governing Law................................................ 8
Sec. 6.6 Counterparts................................................. 8
Sec. 6.7 Third Parties................................................ 9
Sec. 6.8 Notices...................................................... 9
Sec. 6.9 Interpretation............................................... 9
Sec. 6.10 Operation of the Funds...................................... 9
Sec. 6.11 Relationship of Parties; No Joint Venture, Etc.............. 9
AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of the 31st
day of December, 2009, by and among Grosvenor Registered Multi-Strategy Fund (TI
1), LLC (the "Feeder Fund"), a Delaware limited liability company, and Grosvenor
Registered Multi-Strategy Master Fund, LLC (the "Master Fund"), a Delaware
limited liability company.
WITNESSETH
WHEREAS, the Feeder Fund and the Master Fund each is registered under the
Investment Company Act of 1940 (the "1940 Act") as a diversified, closed-end
management investment company;
WHEREAS, the Feeder Fund and the Master Fund each have the same investment
objective and substantially the same investment policies;
WHEREAS, the Feeder Fund desires to pursue its investment objective by
investing on an ongoing basis substantially all of its investable assets (the
"Assets") in the Master Fund in exchange for a beneficial interest in the Master
Fund (the "Investment") on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual promises made
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES
Sec. 1.1 FEEDER FUND. The Feeder Fund represents and warrants to the Master
Fund that:
(a) ORGANIZATION. The Feeder Fund is a Delaware limited liability
company duly organized, validly existing and in good standing under the
laws of the State of Delaware. The Feeder Fund has the requisite power and
authority to own its property and conduct its business as proposed to be
conducted pursuant to this Agreement.
(b) 1940 ACT REGISTRATION. The Feeder Fund is a registered investment
company under the 1940 Act.
(c) REGISTRATION STATEMENT. The Feeder Fund has reviewed the Master
Fund's most recent registration statement on Form N-2, as filed with the
Securities and Exchange Commission (the "SEC").
Sec. 1.2 MASTER FUND. The Master Fund represents and warrants to the Feeder
Fund that:
(a) ORGANIZATION. The Master Fund is a Delaware limited liability
company duly organized, validly existing and in good standing under the
laws of the State of Delaware. The Master Fund has the requisite power and
authority to own its property
and conduct its business as now being conducted and as proposed to be
conducted pursuant to this Agreement.
(b) APPROVAL OF AGREEMENT. No meeting of, or consent by, holders of
Interests (as defined below) of the Master Fund is necessary to approve the
issuance of Interests to the Feeder Fund.
(c) ISSUANCE OF BENEFICIAL INTEREST. The issuance by the Master Fund
of beneficial interests ("Interests") in exchange for the Investment by the
Feeder Fund of its Assets has been duly authorized by all necessary action
on the part of the Board of Directors of the Master Fund. When issued in
accordance with the terms of this Agreement, the Interests will be validly
issued, fully paid and non-assessable.
(d) 1940 ACT REGISTRATION. The Master Fund is duly registered under
the 1940 Act as a closed-end, diversified, management investment company
and such registration is in full force and effect.
(e) SEC FILINGS; SECURITIES EXEMPTIONS. The Master Fund has duly filed
all forms, reports and other documents (collectively, the "SEC Filings")
required to be filed with the SEC under the Securities Act of 1933 (the
"1933 Act"), the Securities Exchange Act of 1934 (the "1934 Act") and the
1940 Act, and the rules and regulations thereunder, (collectively, the
"Securities Laws"). Interests in the Master Fund are not required to be
registered under the 1933 Act, because such Interests are offered solely in
private placement transactions which do not involve any "public offering"
within the meaning of Section 4(2) of the 1933 Act. In addition, Interests
in the Master Fund are either noticed or qualified for sale or exempt from
notice or qualification requirements under applicable securities laws in
those states and other jurisdictions in which Interests are offered and
sold. All SEC Filings relating to the Master Fund comply in all material
respects with the requirements of the applicable Securities Laws and do
not, as of the date of this Agreement, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(f) TAX STATUS. The Master Fund is taxable as a partnership for
Federal income tax purposes under the Internal Revenue Code of 1986, as
amended.
(g) TAXABLE AND FISCAL YEAR. The taxable year end of the Master Fund
is December 31st and the fiscal year end is March 31st.
(h) INSURANCE. As of the date of commencement of its operations, the
Master Fund has in force reasonable insurance coverage against certain
liabilities that may arise as a result of the Master Fund's business as a
registered investment company.
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ARTICLE II
COVENANTS
Sec. 2.1 FEEDER FUND. The Feeder Fund covenants that:
(a) SUBSTITUTION OF INTERESTS. The Feeder Fund shall refrain from
substituting Interests in the Master Fund held by the Feeder Fund unless
the SEC has approved such substitution in accordance with Section 26 of the
1940 Act.
(b) FISCAL YEAR. The Feeder Fund shall take appropriate action to
maintain the same fiscal year end as the Master Fund (currently March
31st).
(c) PROXY VOTING. If requested to vote on matters pertaining to the
Master Fund, the Feeder Fund will either seek instructions from its
investors with regard to the voting of all proxies with respect to the
Master Fund's securities and vote such proxies only in accordance with such
instructions, or vote the Interests held by it in the same proportion as
the vote of all other holders of the Master Fund's securities; provided
that the Feeder Fund will not be obligated to take such action if and to
the extent the Feeder Fund obtains an exemption from Section
12(d)(1)(E)(iii)(aa) of the 1940 Act.
Sec. 2.2 MASTER FUND. The Master Fund covenants that:
(a) SEC FILINGS. The Master Fund will make all SEC Filings required to
be made by it with the SEC under the Securities Laws in connection with any
meetings of the Master Fund's investors and its registration as an
investment company and will provide copies of all such definitive filings
to the Feeder Fund. The Master Fund's SEC Filings will comply in all
material respects with the requirements of the applicable Securities Laws,
and will not, at the time they are filed or used, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(b) 1940 ACT REGISTRATION. The Master Fund will remain duly registered
under the 1940 Act as a closed-end, diversified, management investment
company.
(c) TAX STATUS. Based upon applicable Internal Revenue Service
interpretations and rulings and Treasury Regulations, the Master Fund will
continue to be treated as a partnership for Federal income tax purposes.
(d) SECURITIES EXEMPTIONS. Interests in the Master Fund have been and
will continue to be offered and sold solely in private placement
transactions which do not involve any "public offering" within the meaning
of Section 4(2) of the 1933 Act or require registration or notification
under any state law.
(e) ADVANCE NOTICE OF CERTAIN CHANGES. The Master Fund shall provide
the Feeder Fund with reasonable advance written notice of any change in the
Master Fund's investment objective, or if the Master Fund has knowledge or
should have knowledge that one of the following changes is likely to occur,
written notice shall be
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provided as soon as reasonably possible after the Master Fund obtains or
should have obtained such knowledge, of any material change in the Master
Fund's investment policies or activities, any material increase in the
Master Fund's fees or expenses, or any change in the Master Fund's fiscal
year.
(f) COMPLIANCE WITH LAWS. The Master Fund shall comply, in all
material respects, with all applicable laws, rules and regulations in
connection with conducting its operations as a registered investment
company.
Sec. 2.3 REASONABLE ACTIONS. Each party covenants that it will, subject to
the provisions of this Agreement, from time to time, as and when requested by
another party or in its own discretion, as the case may be, execute and deliver
or cause to be executed and delivered all such documents, assignments and other
instruments, take or cause to be taken such actions, and do or cause to be done
all things reasonably necessary, proper or advisable in order to conduct the
business contemplated by this Agreement and to carry out its intent and purpose.
ARTICLE III
INDEMNIFICATION
Sec. 3.1 FEEDER FUND
(a) The Feeder Fund agrees to indemnify and hold harmless the Master
Fund, and the Master Fund's investment adviser, and any director, officer,
employee or agent of the Master Fund or the Master Fund's investment
adviser (in this Section, each, a "Covered Person" and collectively,
"Covered Persons"), against any and all losses, claims, demands, damages,
liabilities or expenses (including, with respect to each Covered Person,
the reasonable cost of investigating and defending against any claims
therefor and any counsel fees incurred in connection therewith, except as
provided in subparagraph (b)) ("Losses"), that:
(i) arise out of or are based upon any violation or alleged
violation of any of the Securities Laws, or any other applicable
statute, rule, regulation or common law, or are incurred in connection
with or as a result of any formal or informal administrative
proceeding or investigation by a regulatory agency, insofar as such
violation or alleged violation, proceeding or investigation arises out
of or is based upon any direct or indirect omission or commission (or
alleged omission or commission) by the Feeder Fund or by any of its
directors, officers, employees or agents, but only insofar as such
omissions or commissions relate to the Investment; or
(ii) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in any
confidential memoranda or any other offering document of the Feeder
Fund, or any amendments or supplements to the foregoing (in this
Section, collectively "Offering Documents"), or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was not
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made in the Offering Documents in reliance upon and in conformity with
the Master Fund's registration statement on Form N-2 and other written
information furnished by the Master Fund or by any service provider of
the Master Fund for use therein or for use by the Feeder Fund in
preparing such documents, including but not limited to any written
information contained in the Master Fund's current registration
statement on Form N-2;
PROVIDED, HOWEVER, that in no case shall the Feeder Fund be liable for
indemnification hereunder (i) with respect to any claims made against any
Covered Person unless a Covered Person shall have notified the Feeder Fund
in writing within a reasonable time after the summons, other first legal
process, notice of a federal, state or local tax deficiency, or formal
initiation of a regulatory investigation or proceeding giving information
of the nature of the claim shall have properly been served upon or provided
to a Covered Person seeking indemnification or (ii) if such Losses were the
result of the negligence or willful misconduct of the Master Fund. Failure
to notify the Feeder Fund of such claim shall not relieve the Feeder Fund
from any liability that it may have to any Covered Person otherwise than on
account of the indemnification contained in this Section.
(b) The Feeder Fund will be entitled to participate at its own expense
in the defense or, if it so elects, to assume the defense of any suit
brought to enforce any such liability, but if the Feeder Fund elects to
assume the defense, such defense shall be conducted by counsel chosen by
the Feeder Fund. In the event the Feeder Fund elects to assume the defense
of any such suit and retain such counsel, each Covered Person in the suit
may retain additional counsel but shall bear the fees and expenses of such
counsel unless (A) the Feeder Fund shall have specifically authorized the
retaining of and payment of fees and expenses of such counsel or (B) the
parties to such suit include any Covered Person and the Feeder Fund, and
any such Covered Person has been advised in a written opinion by counsel
reasonably acceptable to the Feeder Fund that one or more legal defenses
may be available to it that may not be available to the Feeder Fund, in
which case the Feeder Fund shall not be entitled to assume the defense of
such suit notwithstanding its obligation to bear the fees and expenses of
one counsel to all such persons. The Feeder Fund shall not be required to
indemnify any Covered Person for any settlement of any such claim effected
without its written consent, which consent shall not be unreasonably
withheld or delayed. The indemnities set forth in paragraph (a) will be in
addition to any liability that the Feeder Fund might otherwise have to
Covered Persons.
Sec. 3.2 MASTER FUND.
(a) The Master Fund agrees to indemnify and hold harmless the Feeder
Fund and any affiliate providing services to the Feeder Fund, and any
manager, director, officer, employee or agent of any of them (in this
Section, each, a "Covered Person" and collectively, "Covered Persons"),
against any and all losses, claims, demands, damages, liabilities or
expenses (including, with respect to each Covered Person, the reasonable
cost of investigating and defending against any claims therefor and any
counsel fees incurred in connection therewith, except as provided in
subparagraph (b)) ("Losses"), that:
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(i) arise out of or are based upon any violation or alleged
violation of any of the Securities Laws, or any other applicable
statute, rule, regulation or common law or are incurred in connection
with or as a result of any formal or informal administrative
proceeding or investigation by a regulatory agency, insofar as such
violation or alleged violation, proceeding or investigation arises out
of or is based upon any direct or indirect omission or commission (or
alleged omission or commission) by the Master Fund, or any of its
directors, officers, employees or agents; or
(ii) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in any
advertising or sales literature, or any other SEC Filing relating to
the Master Fund, or any amendments or supplements to the foregoing (in
this Section, collectively, the "Offering Documents") of the Master
Fund, or arise out of or are based upon the omission or alleged
omission to state therein, a material fact required to be stated
therein, or necessary to make the statements therein in light of the
circumstances under which they were made, not misleading; or
(iii) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in any Offering
Documents relating to the Master Fund, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein in light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with
written information furnished to the Master Fund by the Feeder Fund
for use therein or for use by the Master Fund in preparing such
documents, including but not limited to any written information
contained in the Master Fund's current registration statement on Form
N-2.
PROVIDED, HOWEVER, that in no case shall the Master Fund be liable for
indemnification hereunder with respect to any claims made against any
Covered Person unless a Covered Person shall have notified the Master Fund
in writing within a reasonable time after the summons, other first legal
process, notice of a federal, state or local tax deficiency, or formal
initiation of a regulatory investigation or proceeding giving information
of the nature of the claim shall have properly been served upon or provided
to a Covered Person seeking indemnification. Without limiting the
generality of the foregoing, the Master Fund's indemnity to Covered Persons
shall include all relevant liabilities of Covered Persons under the
Securities Laws, as if the Offering Documents constitute a "prospectus"
within the meaning of the 1933 Act, and the Master Fund had registered its
interests under the 1933 Act pursuant to a registration statement meeting
the requirements of the 1933 Act. Failure to notify the Master Fund of such
claim shall not relieve the Master Fund from any liability that it may have
to any Covered Person otherwise than on account of the indemnification
contained in this Section.
(b) The Master Fund will be entitled to participate at its own expense
in the defense or, if it so elects, to assume the defense of any suit
brought to enforce any
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such liability, but, if the Master Fund elects to assume the defense, such
defense shall be conducted by counsel chosen by the Master Fund. In the
event the Master Fund elects to assume the defense of any such suit and
retain such counsel, each Covered Person in the suit may retain additional
counsel but shall bear the fees and expenses of such counsel unless (A) the
Master Fund shall have specifically authorized the retaining of and payment
of fees and expenses of such counsel or (B) the parties to such suit
include any Covered Person and the Master Fund, and any such Covered Person
has been advised in a written opinion by counsel reasonably acceptable to
the Master Fund that one or more legal defenses may be available to it that
may not be available to the Master Fund, in which case the Master Fund
shall not be entitled to assume the defense of such suit notwithstanding
its obligation to bear the fees and expenses of one counsel to such
persons. The Master Fund shall not be required to indemnify any Covered
Person for any settlement of any such claim effected without its written
consent, which consent shall not be unreasonably withheld or delayed. The
indemnities set forth in paragraph (a) will be in addition to any liability
that the Master Fund might otherwise have to Covered Persons.
ARTICLE IV
ADDITIONAL AGREEMENTS
Sec. 4.1 ACCESS TO INFORMATION. Throughout the life of this Agreement, the
Feeder Fund and the Master Fund shall afford each other reasonable access at all
reasonable times to such party's officers, employees, agents and offices and to
all relevant books and records and shall furnish each other party with all
relevant financial and other data and information as such other party may
reasonably request.
Sec. 4.2 CONFIDENTIALITY. Each party agrees that it shall hold in strict
confidence all data and information obtained from another party (unless such
information is or becomes readily ascertainable from public or published
information or trade sources or public disclosure of such information is
required by law) and shall ensure that its officers, employees and authorized
representatives do not disclose such information to others without the prior
written consent of the party from whom it was obtained, except if disclosure is
required by the SEC, any other regulatory body, the Feeder Fund's and the Master
Fund's respective auditors, or in the opinion of counsel to the disclosing party
such disclosure is required by law, and then only with as much prior written
notice to the other parties as is practical under the circumstances. Each party
hereto acknowledges that the provisions of this Section 4.2 shall not prevent
the Master Fund from filing a copy of this Agreement as an exhibit to a
registration statement on Form N-2 as it relates to the Master Fund and that
such disclosure by the Master Fund shall not require any additional consent from
the other parties.
Sec. 4.3 OBLIGATIONS OF THE FEEDER FUND AND THE MASTER FUND. The Master
Fund agrees that the financial obligations of the Feeder Fund under this
Agreement shall be binding only upon the assets of the Feeder Fund, and that
except to the extent liability may be imposed under relevant Securities Laws,
the Master Fund shall not seek satisfaction of any such obligation from the
officers, agents, employees, directors or members of the Feeder Fund. The Feeder
Fund agrees that the financial obligations of the Master Fund under this
Agreement shall be binding only upon the assets of the Master Fund and that,
except to the extent liability may be imposed
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under relevant Securities Laws, the Feeder Fund shall not seek satisfaction of
any such obligation from the officers, agents, employees, directors or members
of the Master Fund.
ARTICLE V
TERMINATION, AMENDMENT
Sec. 5.1 TERMINATION. This Agreement may be terminated at any time by the
mutual agreement in writing of all parties, or by any party on ninety (90) days'
advance written notice to the other parties hereto; provided, however, that
nothing in this Agreement shall limit the Feeder Fund's right to have
repurchased all or a portion of its Interests in accordance with the limited
liability company agreement of the Master Fund and the 1940 Act and the rules
thereunder. The provisions of Article III and Sections 4.2 and 4.3 shall survive
any termination of this Agreement.
Sec. 5.2 AMENDMENT. This Agreement may be amended, modified or supplemented
at any time in such manner as may be mutually agreed upon in writing by the
parties.
ARTICLE VI
GENERAL PROVISIONS
Sec. 6.1 EXPENSES. All costs and expenses incurred in connection with this
Agreement and the conduct of business contemplated hereby shall be paid by the
party incurring such costs and expenses.
Sec. 6.2 HEADINGS. The headings and captions contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Sec. 6.3 ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding between the parties concerning the subject matter of this
Agreement and incorporates or supersedes all prior negotiations and
understandings. There are no covenants, promises, agreements, conditions or
understandings, either oral or written, between the parties relating to the
subject matter of this Agreement other than those set forth herein. This
Agreement may be amended only in a writing signed by all parties.
Sec. 6.4 SUCCESSORS. Each and all of the provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; PROVIDED, HOWEVER, that neither this
Agreement, nor any rights herein granted may be assigned to, transferred to or
encumbered by any party, without the prior written consent of the other parties
hereto.
Sec. 6.5 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to the
conflicts of laws provisions thereof; PROVIDED, HOWEVER, that in the event of
any conflict between the 1940 Act and the laws of New York, the 1940 Act shall
govern.
Sec. 6.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing one or more counterparts.
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Sec. 6.7 THIRD PARTIES. Except as expressly provided in Article III,
nothing herein expressed or implied is intended or shall be construed to confer
upon or give any person, other than the parties hereto and their successors or
assigns, any rights or remedies under or by reason of this Agreement.
Sec. 6.8 NOTICES. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made when delivered in person or three days after being sent by certified or
registered United States mail, return receipt requested, postage prepaid,
addressed:
If to Feeder Fund:
Grosvenor Registered Multi-Strategy Fund (TI 1), LLC
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx
Telephone: 000-000-0000
If to Master Fund:
Grosvenor Registered Multi-Strategy Master Fund, LLC
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx
Telephone: 000-000-0000
Sec. 6.9 INTERPRETATION. Any uncertainty or ambiguity existing herein shall
not be interpreted against any party, but shall be interpreted according to the
application of the rules of interpretation for arms' length agreements.
Sec. 6.10 OPERATION OF THE FUNDS. Except as otherwise provided herein, this
Agreement shall not limit the authority of the Feeder Fund to take such action
as it may deem appropriate or advisable in connection with all matters relating
to the operation of the Feeder Fund and the sale of its interest.
Sec. 6.11 RELATIONSHIP OF PARTIES; NO JOINT VENTURE, ETC. It is understood
and agreed that the Feeder Fund shall not hold itself out as an agent of the
Master Fund with the authority to bind such party, nor shall the Master Fund
hold itself out as an agent of the Feeder Fund with the authority to bind such
party.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers, thereunto duly authorized, as of the date first
written above.
MASTER FUND
GROSVENOR REGISTERED MULTI-STRATEGY MASTER FUND, LLC
By:
---------------------------------
Name:
Title:
FEEDER FUND
GROSVENOR REGISTERED MULTI-STRATEGY FUND (TI 1), LLC
By:
---------------------------------
Name:
Title:
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