ADMINISTRATION AGREEMENT
AGREEMENT made as of March ___, 2005 by and between GMO Alternative Asset
SPC Ltd., (the "Fund"), a Bermuda exempted company, and Investors Bank & Trust
Company, a Massachusetts trust company ("Investors Bank").
WHEREAS, the Fund desires to retain Investors Bank to render certain
administrative services to the Fund and Investors Bank is willing to render such
services.
NOW, THEREFORE, in consideration of the mutual covenants herein set forth,
it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints Investors Bank to act as
Administrator of the Fund on the terms set forth in this Agreement. Investors
Bank accepts such appointment and agrees to render the services herein set forth
for such compensation as shall be agreed in writing by the parties.
2. Delivery of Documents. The Fund has furnished Investors Bank with
copies properly certified or authenticated of each of the following:
(a) A certificate of the Incorporation of the Fund authorizing the
appointment of Investors Bank to provide certain administrative services to the
Fund and approving this Agreement;
(b) The ByeLaws of the Fund, dated March __, 2005 (the "ByeLaws");
(c) The Fund's agreements with all service providers in connection
with the Fund which include any investment advisory agreements and custody
agreements (collectively, the "Agreements");
(d) The most recent private placement memorandum and statement of
additional information of the Fund's sole shareholder, GMO Alternative Asset
Opportunity Fund, which is a series of GMO Trust, a Massachusetts business trust
(the "Parent"); and
(e) Such other certificates, documents or opinions as may mutually
be deemed necessary or appropriate for Investors Bank in the proper performance
of its duties hereunder.
The Fund will immediately furnish Investors Bank with copies of all
amendments of or supplements to the foregoing. Furthermore, the Fund will notify
Investors Bank as soon as possible of any matter which may materially affect the
performance by Investors Bank of its services under this Agreement.
3. Duties of Administrator. Subject to the supervision and direction of
the Fund, Investors Bank, as Administrator, will assist in conducting various
aspects of the Fund's administrative operations and undertakes to perform the
services described in Appendix A hereto. Investors Bank may, from time to time,
perform additional duties and functions which shall be set forth in an amendment
to such Appendix A executed by both parties.
In performing all services under this Agreement, Investors Bank
shall act in conformity with the ByeLaws, as the same may be amended from time
to time, and the investment objectives, investment policies and other practices
and policies set forth in the Offering Memorandum, as the same may be amended
from time to time. Investors Bank may not approve orders on behalf of the Fund
or otherwise execute contracts on behalf of the Fund. Notwithstanding any item
discussed herein, Investors Bank has no discretion over the Fund's assets or
choice of investments and cannot be held liable for any problem relating to such
investments.
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4. Duties of the Fund. The Fund agrees to make its legal counsel
available to Investors Bank for instruction with respect to any matter of law
arising in connection with Investors Bank's duties hereunder, and the Fund
further agrees that Investors Bank shall be entitled to rely on such instruction
without further investigation on the part of Investors Bank.
5. Fees and Expenses.
(a) For the services to be rendered and the facilities to be
furnished by Investors Bank, as provided for in this Agreement, the Fund will
compensate Investors Bank as shall be agreed in writing by the parties. Such
fees do not include out-of-pocket disbursements (or other expenses with the
prior approval of the Fund's management) of Investors Bank for which Investors
Bank shall be entitled to xxxx the Fund separately and for which the Fund shall
reimburse Investors Bank.
(b) Investors Bank shall not be required to pay any expenses
incurred by the Fund or the Fund.
6. Limitation of Liability.
(a) Investors Bank, its directors, officers, employees and agents
shall not be liable for any error of judgment or mistake of law or for any loss
suffered by the Fund in connection with the performance of its obligations and
duties under this Agreement, except a loss resulting from willful misfeasance,
bad faith or gross negligence in the performance of such obligations and duties,
or by reason of its reckless disregard thereof. The Fund will indemnify
Investors Bank, its directors, officers, employees and agents against and hold
it and them harmless from any and all losses, claims, damages, liabilities or
expenses (including legal fees and expenses) resulting from any claim, demand,
action or suit (i) arising out of the actions or omissions of the Fund; (ii)
arising out of the offer or sale of any interests in the Fund in violation of
any requirement under the federal securities laws or regulations or the
securities laws or regulations of any state; or (iii) not resulting from the
willful misfeasance, bad faith or gross negligence of Investors Bank in the
performance of such obligations and duties or by reason of its reckless
disregard thereof.
(b) Investors Bank may apply to the Fund at any time for
instructions and may consult counsel for the Fund, or its own counsel, and with
accountants and other experts with respect to any matter arising in connection
with its duties hereunder, and Investors Bank shall not be liable or accountable
for any action taken or omitted by it in good faith in accordance with such
instruction, or with the opinion of such counsel, accountants, or other experts.
Investors Bank shall not be liable for any act or omission taken or not taken in
reliance upon any document, certificate or instrument which it reasonably
believes to be genuine and to be signed or presented by the proper person or
persons. Investors Bank shall not be held to have notice of any change of
authority of any officers, employees, or agents of the Fund until receipt of
written notice thereof has been received by Investors Bank from the Fund.
(c) In the event Investors Bank is unable to perform, or is delayed
in performing, its obligations under the terms of this Agreement because of acts
of God, strikes, legal constraint, government actions, war, emergency
conditions, interruption of electrical power or other utilities, equipment or
transmission failure or damage reasonably beyond its control or other causes
reasonably beyond its control, Investors Bank shall not be liable to the Fund or
the Fund for any damages resulting from such failure to perform, delay in
performance, or otherwise from such causes.
(d) Notwithstanding anything to the contrary in this Agreement, in
no event shall Investors Bank be liable for special, incidental or consequential
damages, even if advised of the possibility of such damages.
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7. Termination of Agreement.
(a) The term of this Agreement shall be one year commencing upon the
date hereof (the "Initial Term"), unless earlier terminated as provided herein.
After the expiration of the Initial Term, the term of this Agreement shall
automatically renew for successive one-year terms (each a "Renewal Term") unless
notice of non-renewal is delivered by the non-renewing party to the other party
no later than sixty days prior to the expiration of the Initial Term or any
Renewal Term, as the case may be.
Either party hereto may terminate this Agreement prior to the
expiration of the Initial Term in the event the other party violates any
material provision of this Agreement, provided that the violating party does not
cure such violation within sixty days of receipt of written notice from the
non-violating party of such violation.
(b) At any time after the termination of this Agreement, the Fund
may, upon written request, have reasonable access to the records of Investors
Bank relating to its performance of its duties as Administrator.
8. Miscellaneous.
(a) Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Fund or Investors Bank shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
To the Fund: Grantham, Mayo, Van Otterloo & Co. LLC
00 Xxxxx Xxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Legal
With a copy to: Fund Admin.
To Investors Bank: Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxx, XX 00000-0000
Attention: Xxxxx Xxxx, Senior Director, Client
Management
With a copy to: Xxxxxx Xxxxx, Deputy Counsel
(b) This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable without the written consent of the
other party.
(c) This Agreement shall be construed in accordance with the laws of
the Commonwealth of Massachusetts, without regard to its conflict of laws
provisions.
(d) This Agreement may be executed in any number of counterparts
each of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
(e) The captions of 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.
(f) This Agreement shall be executed by the Fund outside of The
Commonwealth of Massachusetts.
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9. Confidentiality. All books, records, information and data pertaining
to the business of the other party which are exchanged or received pursuant to
the negotiation or the carrying out of this Agreement shall remain confidential,
and shall not be voluntarily disclosed to any other person, except as may be
required in the performance of duties hereunder or as otherwise required by law.
10. Use of Name. The Fund shall not use the name of Investors Bank or
any of its affiliates in any prospectus, sales literature or other material
relating to the Fund or the Fund in a manner not approved by Investors Bank
prior thereto in writing; provided however, that the approval of Investors Bank
shall not be required for any use of its name which merely refers in accurate
and factual terms to its appointment hereunder or which is required by the
Securities and Exchange Commission or any state securities authority or any
other appropriate regulatory, governmental or judicial authority; provided
further, that in no event shall such approval be unreasonably withheld or
delayed.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed and delivered by their duly authorized officers as of the date
first written above.
GMO ALTERNATIVE ASSET SPC LTD.
By:
By: ______________________________
Name:
Title:
INVESTORS BANK & TRUST COMPANY
By: ______________________________
Name:
Title:
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Appendices
Appendix A..................................................... Services
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Appendix A
INVESTORS BANK & TRUST COMPANY
SUMMARY OF ADMINISTRATIVE SERVICE FUNCTIONS
RESPONSIBILITY MATRIX
CLIENT (GMO Real Asset
FUNCTION FREQUENCY INVESTORS BANK & TRUST CO. (IBT) SPC, Ltd.) Accounting Firm, Other
--------------------- ---------- ------------------------------------- ------------------------------- -----------------------------
Coordinate the annual Annually - Draft financial statements and - Review and approve report. - Accountants perform
audit and preparation coordinate auditor and management - Coordinate printing of audit and issue
and printing of review. reports. opinion on annual
financial statements financial statements.
and notes
Calculate GAAP to tax For Excise - Identify and calculate book-tax - Provide guidance on book-tax - Accountants to communicate
adjustments and Fiscal differences. differences and calculations. and provide guidance
- Prepare tax workpapers and apply - Approve tax accounting related to calculation of
the book-tax differences positions taken. tax adjustments.
identified. - Accountants to confirm
- Maintain carryforward schedules appropriate identification
for book-tax differences. and treatment of book-tax
differences.
Communicate and As needed - Raise and propose resolution to - Raise and assist in the - Raise and propose
resolve technical any technical issues. resolution to any technical resolution to any technical
issues - Provide consultation as needed issues. issues.
in identifying positions to be - Client is responsible for the - Accountants to provide
taken in tax treatment of identification of and timely sign-off on
particular issues as they may notification to IBT for all treatment of issues raised.
arise. PFICs and CFCs, if
applicable.
Communicate status Annually/ - Maintain a production schedule - Approve production schedule. - Accountants to approve
of deliverable due As needed for the year end cycle for audit, - Communicate any operational production schedule.
dates financial statements and tax return issues that would change - Accountants to communicate
preparation. ability to meet any operational issues that
- Communicate any operational issues pre-established key would change ability to
that would change ability to meet deliverable dates. meet pre-established key
pre-established key deliverable - Agree interim review dates deliverable dates.
dates prior to receipt of all - Accountants to agree
- Agree to interim review dates applicable information interim review dates prior
prior to receipt of all applicable required to complete a full to receipt of all
information required to complete a and accurate return applicable information
full and accurate return. required
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Appendix A
CLIENT (GMO Real Asset
FUNCTION FREQUENCY INVESTORS BANK & TRUST CO. (IBT) SPC, Ltd.) Accounting Firm, Other
------------------- ---------- ------------------------------------- ------------------------------- ----------------------
Prepare the funds Annually - Prepare preliminary expense budget. - Provide asset level -
annual expense Notify fund accounting agents of projections. Approve expense
budget. Establish new accrual rates budget
daily accruals
Monitor the Fund's Quarterly - Monitor actual expenses, updating - Provide asset level -
expense budget. budgets/expense accruals. projections and vendor
information as necessary.
Review and approve budget
revisions.
Receive and As often as - Process payments. - Approve invoices. Send -
coordinate payment necessary invoices to IBT in a timely
of fund expenses manner.
REVIEW AND APPROVAL
The attached Proposed Summary of Administrative Service Functions has been
reviewed and updated and represents the services currently being provided or to
be provided.
_____________________________________________ ________________________
Signature of IBT Representative Date
_____________________________________________ ________________________
Signature of Authorized Client Representative Date
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