Exhibit (25)(2)(k)(3)
MASTER / FEEDER
AGREEMENT
BETWEEN
GROSVENOR REGISTERED MULTI-STRATEGY FUND (TI 2), 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
2), 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 2), 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 2), LLC
By:
--------------------------------
Name:
Title:
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