Exhibit (25)(2)(k)(3)
MASTER / FEEDER
AGREEMENT
BETWEEN
GROSVENOR REGISTERED MULTI-STRATEGY FUND (TE), LLC
AND
GROSVENOR MULTI-STRATEGY OFFSHORE FUND, LTD.
DATED AS OF
MARCH 1, 2010
TABLE OF CONTENTS
PAGE
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ARTICLE I REPRESENTATIONS AND WARRANTIES................................. 1
Sec. 1.1 Feeder Fund.................................................. 1
Sec. 1.2 Offshore Fund................................................ 1
ARTICLE II COVENANTS..................................................... 2
Sec. 2.1 Feeder Fund.................................................. 2
Sec. 2.2 Offshore Fund................................................ 3
Sec. 2.3 Reasonable Actions........................................... 3
ARTICLE III INDEMNIFICATION.............................................. 4
Sec. 3.1 Feeder Fund.................................................. 4
Sec. 3.2 Offshore 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 Offshore Fund......... 7
ARTICLE V TERMINATION, AMENDMENT......................................... 7
Sec. 5.1 Termination.................................................. 7
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................................................ 8
Sec. 6.8 Notices...................................................... 8
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 1st day
of March, 2010, by and among Grosvenor Registered Multi-Strategy Fund (TE), LLC
(the "Feeder Fund"), a Delaware limited liability company, and Grosvenor
Multi-Strategy Offshore Fund, Ltd. (the "Offshore Fund"), an exempted company
incorporated under the laws of the Cayman Islands.
WITNESSETH
WHEREAS, the Feeder Fund 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 Offshore Fund each have the same
investment objective and substantially the same investment policies; and
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 Offshore Fund in consideration for Class A shares (the
"Shares") of the Offshore 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
Offshore 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) CONFIDENTIAL MEMORANDUM. The Feeder Fund has reviewed the
Offshore Fund's most recent confidential memorandum.
Sec. 1.2 OFFSHORE FUND. The Offshore Fund represents and warrants to the
Feeder Fund that:
(a) ORGANIZATION. The Offshore Fund is an exempted company duly
incorporated, validly existing and in good standing under the laws of
the Cayman Islands. The Offshore 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 Shares of the Offshore Fund is necessary to approve the issuance of
Shares to the Feeder Fund.
(c) ISSUANCE OF SHARES. The issuance by the Offshore Fund of
Shares in consideration 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 Offshore Fund. When issued in accordance
with the terms of this Agreement, the Shares will be validly issued,
fully paid and non-assessable.
(d) SEC FILINGS; SECURITIES EXEMPTIONS. The Offshore Fund has
duly filed all forms, reports and other documents (collectively, the
"SEC Filings") required to be filed with the Securities and Exchange
Commission (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"). Shares of the Offshore Fund are not required to be
registered under the 1933 Act, because such Shares 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 and/or
pursuant to either Regulation D or Regulation S promulgated
thereunder, as applicable. In addition, Shares of the Offshore 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 Shares are offered and sold.
All SEC Filings relating to the Offshore 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.
(e) TAX STATUS. The Offshore Fund is taxable as a corporation for
Federal income tax purposes under the Internal Revenue Code of 1986,
as amended. Neither the Offshore Fund nor its shareholders are, under
existing legislation, subject to any Cayman Islands income, corporate
or capital gains tax, estate duty, inheritance tax, gift tax or
withholding tax.
(f) TAXABLE AND FISCAL YEAR. The taxable year end of the Offshore
Fund is December 31st and the fiscal year end is March 31st.
ARTICLE II
COVENANTS
Sec. 2.1 FEEDER FUND. The Feeder Fund covenants that:
(a) SUBSTITUTION OF SHARES. The Feeder Fund shall refrain from
substituting Shares of the Offshore Fund held by the Feeder Fund
unless the SEC has approved such substitution in accordance with
Section 26 of the 1940 Act.
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(b) FISCAL YEAR. The Feeder Fund shall take appropriate action to
maintain the same fiscal year end as the Offshore Fund (currently
March 31st).
(c) PROXY VOTING. If requested to vote on matters pertaining to
the Offshore Fund, the Feeder Fund will seek instructions from its
investors with regard to the voting of all proxies with respect to the
Offshore Fund's securities and vote such proxies only in accordance
with such instructions.
Sec. 2.2 OFFSHORE FUND. The Offshore Fund covenants that:
(a) SEC FILINGS. The Offshore Fund will make all SEC Filings
required to be made by it with the SEC under the Securities Laws. The
Offshore 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) TAX STATUS. Based upon applicable Internal Revenue Service
interpretations and rulings and Treasury Regulations, the Offshore
Fund will continue to be treated as a corporation for Federal income
tax purposes.
(c) SECURITIES EXEMPTIONS. Shares of the Offshore 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. Shares of the Offshore Fund will be
offered and sold to the Feeder Fund pursuant to Regulation D or other
investors pursuant to Regulation S, both under the 1933 Act.
(d) ADVANCE NOTICE OF CERTAIN CHANGES. The Offshore Fund shall
provide the Feeder Fund with reasonable advance written notice of any
change in the Offshore Fund's investment objective, or if the Offshore
Fund has knowledge or should have knowledge that one of the following
changes is likely to occur, written notice shall be provided as soon
as reasonably possible after the Offshore Fund obtains or should have
obtained such knowledge, of any material change in the Offshore Fund's
investment policies or activities, any material increase in the
Offshore Fund's fees or expenses, or any change in the Offshore Fund's
fiscal year.
(e) COMPLIANCE WITH LAWS. The Offshore Fund shall comply, in all
material respects, with all applicable laws, rules and regulations in
connection with conducting its operations.
(f) VIOLATIONS OF ARTICLES OF ASSOCIATION. The Offshore Fund
hereby submits to the jurisdiction of the courts of the United States
in connection with the enforcement by the Feeder Fund of its rights
with respect to any violations of the Articles of Association of the
Offshore Fund.
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
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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
Offshore Fund, and the Offshore Fund's investment adviser, and any
director, officer, employee or agent of the Offshore Fund or the
Offshore 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 made in the Offering Documents in reliance upon
and in conformity with the Offshore Fund's confidential
memorandum and other written information furnished by the
Offshore Fund or by any service provider of the Offshore 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 Offshore Fund's current confidential memorandum;
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
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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
Offshore 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 OFFSHORE FUND.
(a) The Offshore 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:
(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 Offshore Fund, or any of its directors,
officers, employees or agents; or
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(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 Offshore Fund, or any amendments or supplements to the
foregoing (in this Section, collectively, the "Offering
Documents") of the Offshore 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 Offshore 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 Offshore Fund by the Feeder Fund for
use therein or for use by the Offshore Fund in preparing such
documents, including but not limited to any written information
contained in the Offshore Fund's current confidential memorandum.
PROVIDED, HOWEVER, that in no case shall the Offshore Fund be
liable for indemnification hereunder with respect to any claims made
against any Covered Person unless a Covered Person shall have notified
the Offshore 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 Offshore 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 Offshore 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 Offshore Fund of such claim shall not relieve
the Offshore 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 Offshore 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 Offshore
Fund elects to assume the defense, such defense shall be conducted by
counsel chosen by the Offshore Fund. In the event the Offshore 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
Offshore 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 Offshore Fund, and any
such Covered Person has been advised in a written opinion by counsel
reasonably acceptable to the Offshore Fund that one or more legal
defenses may be available to it
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that may not be available to the Offshore Fund, in which case the
Offshore 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 Offshore 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 Offshore
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 Offshore 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
Offshore 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.
Sec. 4.3 OBLIGATIONS OF THE FEEDER FUND AND THE OFFSHORE FUND. The Offshore
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 Offshore 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 Offshore Fund under this
Agreement shall be binding only upon the assets of the Offshore Fund and that,
except to the extent liability may be imposed under relevant Securities Laws,
the Feeder Fund shall not seek satisfaction of any such obligation from the
officers, agents, employees, directors or shareholders of the Offshore 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 tender all or a
portion of its Shares for redemption in accordance with the Memorandum of
Association and Articles of Association of the Offshore 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.
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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.
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:
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If to Feeder Fund:
Grosvenor Registered Multi-Strategy Fund (TE), LLC
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx
Telephone: 000-000-0000
If to Offshore Fund:
Grosvenor Multi-Strategy Offshore Fund, Ltd.
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
Offshore Fund with the authority to bind such party, nor shall the Offshore 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.
OFFSHORE FUND
GROSVENOR MULTI-STRATEGY OFFSHORE
FUND, LTD.
By:
---------------------------------
Name:
Title:
FEEDER FUND
GROSVENOR REGISTERED MULTI-STRATEGY
FUND (TE), LLC
By:
---------------------------------
Name:
Title:
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