Exhibit (k)(4)
Specimen
Draft 4-12-04
TRANSFER AGENT AGREEMENT
THIS TRANSFER AGENT AGREEMENT ("Agreement") is hereby made and entered into as
of the ___ day of April 2004, by and between the GENERATION HEDGE STRATEGIES
FUND, LLC, a Delaware limited liability company ("Fund"), and NORTH CAROLINA
SHAREHOLDER SERVICES, LLC, a North Carolina limited liability company d/b/a NC
Shareholder Services ("Transfer Agent").
WHEREAS, the Fund is registered as a closed-end management investment company
under the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, the Transfer Agent is in the business of providing dividend disbursing,
transfer agent, and shareholder services to investment companies.
NOW THEREFORE, the Fund and the Transfer Agent do mutually promise and agree as
follows:
1. Employment. The Fund hereby employs Transfer Agent to act as a transfer
agent for the Fund. Transfer Agent, at its own expense, shall render
the services and assume the obligations herein set forth subject to
being compensated therefore as herein provided.
2. Delivery of Documents. The Fund has furnished the Transfer Agent with
copies properly certified or authenticated of each of the following:
a) The Fund's Organization Agreement ("Organizational Agreement")
and Certificate of Authority, as filed with the State of
Delaware;
b) Resolutions of the Fund's Board of Directors authorizing the
appointment of the Transfer Agent and approving this
Agreement; and
c) The Fund's registration statement ("Registration Statement")
on Form ___ under the 1940 Act and under the Securities Act of
1933 as amended, (the "1933 Act"), including all exhibits,
relating to shares of beneficial interest of, and containing
the offering documents ("Offering Documents") as filed with
the Securities and Exchange Commission and all amendments
thereto.
The Fund will also furnish the Transfer Agent with copies, properly certified or
authenticated, of all amendments of or supplements to the foregoing.
3. Duties of the Transfer Agent. Subject to the policies and direction of
the Fund's board of Directors ("Board of Directors"), the Transfer
Agent will provide day-to-day supervision for the dividend disbursing,
transfer agent, and shareholder servicing operations of each of the
Fund. Services to be provided shall be in accordance with the Fund's
Organizational Agreement and registration documents as listed in
paragraph 2 hereof and with the Offering Documents. The Transfer Agent
further agrees that it:
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a) Will conform with all applicable rules and regulations of the
Securities and Exchange Commission and will, in addition,
conduct its activities under this Agreement in accordance with
regulations of any other federal and state agency which may
now or in the future have jurisdiction over its activities;
and
b) Will provide, at its expense, the non-executive personnel and
data processing equipment and software necessary to perform
the Shareholder Servicing functions shown on Exhibit A hereof.
Notwithstanding anything contained in this Agreement to the contrary,
the Transfer Agent (including its directors, officers, employees and
agents) shall not be required to perform any of the duties of, assume
any of the obligations or expenses of, or be liable for any of the acts
or omissions of, any investment advisor of the Fund or other third
party subject to separate agreements with the Fund. The Transfer Agent
shall not be responsible hereunder for the administration of the code
of ethics of the Fund ("Code of Ethics") which shall be under the
responsibility of the investment advisors, except insofar as the Code
of Ethics applies to the personnel of the Transfer Agent. It is the
express intent of the parties hereto that the Transfer Agent shall not
have control over or be responsible for the placement (except as
specifically directed by a shareholder of the Fund), investment or
reinvestment of the assets of the Fund. The Transfer Agent may from
time to time, obtain at its own expense, the services of consultants or
other third parties to perform part or all of its duties hereunder, and
such parties may be affiliates of the Transfer Agent.
4. Services Not Exclusive. The services furnished by the Transfer Agent
hereunder are not to be deemed exclusive, and the Transfer Agent shall
be free to furnish similar services to others so long as its services
under this Agreement are not impaired thereby.
5. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Transfer Agent hereby agrees that all records
which it maintains for the Fund are the property of the Fund and
further agrees to surrender promptly to the Fund any of such records
upon the Fund's request.
6. Expenses. During the term of this Agreement, the Transfer Agent will
furnish at its own expense its office space and the executive,
supervisory and clerical personnel reasonably necessary to perform of
its obligations under this Agreement. The Fund assumes and shall be
responsible for all other expenses of the Fund not otherwise allocated
in this Agreement.
7. Compensation. For the services provided and the expenses assumed by the
Transfer Agent pursuant to this Agreement, the Fund will pay the
Transfer Agent the fees and expenses as set forth on Exhibit B attached
hereto. Special projects, not included herein and requested in writing
by the Directors, shall be completed by the Transfer Agent and invoiced
to the Fund on terms mutually agreed upon.
8.(a) Limitation of Liability. The Transfer Agent shall not be liable for any
loss, damage or liability related to or resulting from the placement
(except as specifically directed by a Shareholder of the Fund),
investment or reinvestment of assets in the Fund or the acts or
omissions of the Fund's investment advisor(s) or any other third party
subject to separate agreements with the Fund. Further, the Transfer
Agent shall not be liable for any error of judgment or mistake of law
or for any loss or damage suffered by the Fund in connection with the
performance of this Agreement or any agreement with a third party,
except a loss resulting directly from (i) a breach of fiduciary duty on
the part of the Transfer Agent with respect to the receipt of
compensation for services; or (ii) willful misfeasance, bad faith or
gross negligence on the part of the Transfer Agent in the performance
of its duties or from reckless disregard by it of its duties under this
Agreement.
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8.(b) Indemnification of Transfer Agent. Subject to the limitations set forth
in this Subsection 8(b), and provided the Transfer Agent has exercised
reasonable customary care in the performance of its duties under this
Agreement, the Fund shall indemnify, defend and hold harmless (from the
assets of the Fund) the Transfer Agent against all loss, damage and
liability, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses,
including reasonable accountants' and counsel fees, incurred by the
Transfer Agent in connection with the defense or disposition of any
action, suit or other proceeding, whether civil or criminal, before any
court or administrative or legislative body, related to or resulting
from this Agreement or the performance of services hereunder, except
with respect to any matter as to which it has been determined that the
loss, damage or liability is a direct result of (i) a breach of
fiduciary duty on the part of the Transfer Agent with respect to the
receipt of compensation for services; or (ii) willful misfeasance, bad
faith or gross negligence on the part of the Transfer Agent in the
performance of its duties or from reckless disregard by it of its
duties under this Agreement (either and both of the conduct described
in clauses (i) and (ii) above being referred to hereinafter as
"Disabling Conduct"). A determination that the Transfer Agent is
entitled to indemnification may be made by (i) a final decision on the
merits by a court or other body before whom the proceeding was brought
that the Transfer Agent was not liable by reason of Disabling Conduct,
(ii) dismissal of a court action or an administrative proceeding
against the Transfer Agent for insufficiency of evidence of Disabling
Conduct, or (iii) a reasonable determination, based upon a review of
the facts, that the Transfer Agent was not liable by reason of
Disabling Conduct by (a) vote of a majority of a quorum of Directors
who are neither "interested persons" of the Fund as the quoted phrase
is defined in Section 2(a)(19) of the 1940 Act nor parties to the
action, suit or other proceeding on the same or similar grounds that is
then or has been pending or threatened (such quorum of such Directors
being referred to hereinafter as the "Independent Directors") or (b) an
independent legal counsel approved by the Directors, including a
majority of Independent Directors, (hereinafter referred to as an
"independent legal counsel") in a written opinion. Expenses, including
accountants' and counsel fees so incurred by the Transfer Agent (but
excluding amounts paid in satisfaction of judgments, in compromise or
as fines or penalties), shall be paid from time to time by the Fund in
advance of the final disposition of any such action, suit or
proceeding; provided, that the Transfer Agent shall have undertaken to
repay the amounts so paid unless it is ultimately determined that it is
entitled to indemnification of such expenses under this Subsection 8(b)
and if (i) the Transfer Agent shall have provided security for such
undertaking, (ii) the Fund shall be insured against losses arising by
reason of any lawful advances, or (iii) a majority of the Independent
Directors, or an independent legal counsel in a written opinion, shall
have determined, based on a review of readily available facts (as
opposed to a full trial-type inquiry), that there is reason to believe
that the Transfer Agent ultimately will be entitled to indemnification
hereunder.
As to any matter disposed of by a compromise payment by the Transfer
Agent referred to in this Subsection 8(b), pursuant to a consent decree
or otherwise, no such indemnification either for said payment or for
any other expenses shall be provided unless such indemnification shall
be approved (i) by a majority of the Independent Directors or (ii) by
an independent legal counsel in a written opinion. Approval by the
Independent Directors pursuant to clause (i) shall not prevent the
recovery from the Transfer Agent of any amount paid to the Transfer
Agent in accordance with either of such clauses as indemnification of
the Transfer Agent is subsequently adjudicated by a court of competent
jurisdiction not to have acted in good faith in the reasonable belief
that the Transfer Agent's action was in or not opposed to the best
interests of the Fund or to have been liable to the Fund or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in its conduct
under the Agreement.
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The right of indemnification provided by this Subsection 8(b) shall not
be exclusive of or affect any of the rights to which the Transfer Agent
may be entitled. Nothing contained in this Subsection 8(b) shall affect
any rights to indemnification to which Directors, officers or other
personnel of the Fund, and other persons may be entitled by contract or
otherwise under law, nor the power of the Fund to purchase and maintain
liability insurance on behalf of any such person.
The Board of Directors of the Fund shall take all such action as may be
necessary and appropriate to authorize the Fund hereunder to pay the
indemnification required by this Subsection 8(b) including, without
limitation, to the extent needed, to determine whether the Transfer
Agent is entitled to indemnification hereunder and the reasonable
amount of any indemnity due it hereunder, or employ independent legal
counsel for that purpose.
The provisions contained in Section 8 shall survive the expiration or
other termination of this Agreement, shall be deemed to include and
protect the Transfer Agent and its directors, officers, employees and
agents and shall inure to the benefit of its/their respective
successors, assigns and personal representatives.
9. Duration and Termination. This Agreement shall become effective as of
the date hereof and shall thereafter continue in effect unless
terminated as herein provided. This Agreement may be terminated by
either party hereto (without penalty) at any time by giving not less
than 60 days' prior written notice to the other party hereto. Upon
termination of this Agreement, the Fund shall pay to the Transfer Agent
such compensation as may be due as of the date of such termination, and
shall likewise reimburse the Transfer Agent for any out-of-pocket
expenses and disbursements reasonably incurred by the Transfer Agent to
such date.
10. Amendment. This Agreement may be amended by mutual written consent of
the parties. If, at any time during the existence of this Agreement,
the Fund deems it necessary or advisable in the best interests of the
Fund that any amendment of this Agreement be made in order to comply
with the recommendations or requirements of the Securities and Exchange
Commission or state regulatory agencies or other governmental
authority, or to obtain any advantage under state or federal tax laws,
and shall notify the Transfer Agent of the form of Amendment which it
deems necessary or advisable and the reasons therefore, and if the
Transfer Agent declines to assent to such amendment, the Fund may
terminate this Agreement forthwith.
11. Notice. Any notice that is required to be given by the parties to each
other under the terms of this Agreement shall be in writing and will be
deemed sufficient if personally delivered or sent by registered or
certified mailed, postage prepaid, address to the other party at the
principal place of business of such party. Notices shall be effective
upon delivery.
12. Construction. This Agreement shall be governed and enforced in
accordance with the laws of the State of North Carolina without regard
to the principles of the conflict of laws or the choice of laws. If any
provision of this Agreement, or portion thereof, shall be determined to
be void or unenforceable by any court of competent jurisdiction, then
such determination shall not affect any other provision of this
Agreement, or portion thereof, all of which other provisions and
portions thereof shall remain in full force and effect. If any
provision of this Agreement, or portion thereof, is capable of two
interpretations, one of which would render the provision, or portion
thereof, void and the other of which would render the provision, or
portion thereof, valid, then the provision, or portion thereof, shall
have the meaning which renders it valid.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their duly authorized officers effective as of the date indicated above.
GENERATION HEDGE STRATEGIES FUND, LLC
By:
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Name:
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Title:
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NORTH CAROLINA SHAREHOLDER SERVICES, LLC
D/B/A NC SHAREHOLDER SERVICES
By:
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Name: Xxxx X. Marriott, Jr.
Title: Managing Director
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Exhibit A
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SHAREHOLDER SERVICING FUNCTIONS
(1) Process new accounts.
(2) Process purchases of Fund shares, both initial and subsequent in
accordance with conditions set forth in the Fund's Offering Documents.
(3) Transfer shares of capital stock to an existing account or to a new
account upon receipt of required documentation in good order.
(4) Distribute dividends and/or capital gain distributions. This includes
disbursement as cash or reinvestment and to change the disbursement
option at the request of shareholders.
(5) Process exchanges between funds (process and direct purchase/redemption
and initiate new account or process to existing account), if
applicable.
(6) Make miscellaneous changes to records, including, but not necessarily
limited to, address changes and changes in plans (such as systematic
withdrawal, dividend reinvestment, etc.).
(7) Prepare and mail a year-to-date confirmation and statement as each
transaction is recorded in a shareholder account as follows: original
to shareholder. Duplicate confirmations to be available on request
within current year.
(8) Handle telephone calls and correspondence in reply to shareholder
requests except those items otherwise set forth herein.
(9) Daily control and reconciliation of Fund shares.
(10) Prepare address labels or confirmations for up to four reports to
shareholders per year.
(11) Mail and tabulate proxies for one Meeting of Shareholders annually,
including preparation of certified shareholder list and daily report
to Fund management, if required.
(12) Assist the Fund's accountants in the preparation of, and mail, annual
Form 1099 and 5498 to shareholders to whom dividends or distributions
are paid, with a copy for the IRS.
(13) Provide readily obtainable data which may from time to time be
requested for audit purposes.
(14) Replace lost or destroyed checks.
(15) Continuously maintain customary records for active and closed accounts
according to the Investment Company Act of 1940 and regulations
provided thereunder.
Exhibit B
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TRANSFER AGENT'S COMPENSATION SCHEDULE
For the services delineated in the TRANSFER AGENT AGREEMENT, the Transfer Agent
shall be compensated monthly, according to the following fee schedule.
Shareholder servicing fee:
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$15.00 per shareholder per year per fund
Minimum fee of $1,500 per month per fund, plus $500 per month for each
additional class of shares.
In addition, the Transfer Agent shall be entitled to reimbursement of actual
out-of-pocket expenses incurred by the Transfer Agent on behalf of the Fund.
