XXXXX & XXXXXXXX FUND SERVICES, LLC
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CLIENT SERVICES AGREEMENT
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This agreement, dated as of ________, 2002 is by and between
Xxxxx & Xxxxxxxx Fund Services, LLC ("C&M"), a Delaware limited liability
company and Torrey Associates, LLC, a limited liability company formed under the
laws of Delaware, ("Fund Management") and the investment funds listed on
Schedule C attached to this Agreement (the "Funds").
WHEREAS, the Funds were formed for the purposes described in
their respective offering memoranda, as provided to C&M by Fund Management and
amended from time to time;
WHEREAS, the Funds and Fund Management (on behalf of the
Funds) desire to retain C&M and utilize the accounting, compliance, operational
and administrative support services provided by C&M described in Schedule A
attached hereto;
WHEREAS, Fund Management is authorized, as each of the Fund's
advisor or investment manager (as applicable), pursuant to each of the Fund's
organizational documentation to retain C&M on behalf of the Funds;
WHEREAS, C&M desires to provide such accounting, compliance
and administrative support services to the Funds; and
NOW THEREFORE, in consideration of the promises and the mutual
covenants contained herein and for such other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties,
subject to the terms and conditions set forth below, hereby agree as follows:
1. Fund Operational and Compliance Support Services. Under the supervision
of Fund Management, C&M shall be responsible for performing and is hereby
authorized and empowered to perform, at the expense of the Funds, all duties and
functions necessary or appropriate in connection with providing operational and
compliance support to the Funds. A list of the operational and compliance
services which may be provided to the Funds is set forth in the attached
Schedule A.
2. Accounting and Administration. Under the supervision of Fund Management,
C&M shall be responsible for performing and is hereby authorized and empowered
to perform, at the expense of the Funds, all duties and functions necessary or
appropriate in connection with providing accounting and administrative support
to the Funds. A list of the accounting and administrative support services which
may be provided to the Funds is set forth in the attached Schedule A.
3. Provision of Certain Documentation. The Funds and Fund Management agree
to provide C&M with the most recent versions of all of the Funds' offering
documentation and material contracts (including, but not limited to, the Funds'
offering memoranda, Limited Liability Company Agreements, Memoranda and Articles
of Association, Subscription Documents, employment agreements, solicitation
agreements, etc.). The Funds and Fund Management further agree to promptly
provide C&M with amendments to any such documents.
4. Fees and Expense. The Funds shall pay C&M fees in accordance with
Schedule B attached hereto and certain expenses of C&M shall be reimbursed as
described in Schedule B. This Agreement constitutes authorization for the Funds'
prime broker(s) or custodian(s) to pay the fees to C&M.
5. Liability. C&M will give the Funds (and Fund Management) the benefit of
its best judgment and efforts in rendering these services to the Funds, and it
is agreed as an inducement to its undertaking these services that C&M and its
principals, officers and employees shall not be liable hereunder for any mistake
of judgment or in any event whatsoever, except for lack of good faith; provided
that nothing herein shall be deemed to protect or purport to protect C&M or its
principals, officers or employees against any liability to the Funds which any
such persons would otherwise be subject by reason of bad faith, gross
negligence, willful misconduct or violation of applicable law in the performance
of the obligations and duties hereunder.
6. Indemnification. The Funds and Fund Management agree to indemnify and
hold C&M, its principals, officers and employees harmless from any loss, damage,
liability or expense, including reasonable attorneys' fees and other legal
expenses, to which C&M (or its principals, employees or agents) may become
subject arising out of any claim or threatened to be asserted in connection with
the services that C&M provides to the Funds in good faith under this Agreement;
provided, that C&M shall not be entitled to such indemnification with respect to
any loss, damage, liability or expense which is due to C&M's gross negligence,
willful misconduct or where such indemnification would be a violation of
applicable law.
7. Non- Exclusivity. C&M services hereunder are not exclusive to the Funds
and Fund Management. C&M may, at its sole discretion, provide similar services
to other clients.
8. Confidentiality & Proprietary Information. C&M agrees and understands
that all materials provided to C&M in connection with its provision of services
to the Funds under this Agreement will be held by C&M in confidence for use only
for the purpose of providing services under this Agreement and will not be
provided to any other persons or entities without the prior written approval of
Fund Management, unless otherwise required under applicable law. If C&M is
required by law to provide any such materials to a third party, C&M will use its
best efforts to give the Funds and Fund Management prior notification.
The Funds and Fund Management agree and understand that the proprietary
forms of reports, standardized agreements and other documentation generated by
C&M in the course of it providing accounting, administrative, operational and
compliance services to the Funds and Fund Management during the term of this
Agreement (the "C&M Forms") are the property of C&M. The Funds and Fund
Management also agree and understand that the C&M Forms are confidential and
cannot be provided to any other third party (except that the Funds and Fund
Management may provide C&M Forms to their professional advisors or, unless
required by applicable law) or be used or re-generated by the Funds, Fund
Management or their affiliates (or their professional advisors) after the
termination of this Agreement without the prior written approval of C&M. C&M
agrees and understands that the substantive information about the Funds, its
investors, portfolio holdings and Fund Management contained in C&M Forms
generated by C&M during the term of this Agreement are the property of the Funds
and Fund Management.
9. Assignment. This Agreement may not be assigned by either party without
the prior, written consent of the other party.
10. Termination. This Agreement may be terminated by either party at the
end of any year on 60 days prior written notice to the other party.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to any
provision of New York law that would permit the law of another state to apply.
12. Amendments. This Agreement, which represents the sole Agreement of the
parties with respect to the subject matter hereof, may not be amended or
modified except by an instrument signed by both parties.
13. Survival. The representations, warranties and covenants provided herein
shall survive the termination of this Agreement.
14. Binding Effect of Agreement. Subject to Section 8 above, this Agreement
shall be binding on the successors, assigns and the legal representatives of
each of the parties.
15. Notices. All notices shall be in writing and shall be deemed to have
been duly given (i) if delivered in person or by courier, on the date it is
delivered; (ii) if sent by certified or registered mail (airmail, if overseas)
or the equivalent (return receipt requested), on the date that mail is delivered
or its delivery is attempted; and (iii) if sent by facsimile, on generation of
confirmation, to the following respective addresses until a different address is
specified in writing by one party to the other party:
To C&M:
000 Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
telephone: (000) 000-0000
facsimile: (000) 000-0000
To the Funds and Fund Management:
000 Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
telephone: (000) 000-0000
facsimile: (000) 000-0000
IN WITNESS WHEREOF, the parties have executed this Agreement as of the ___day of
__________, 2002.
Xxxxx & Xxxxxxxx Fund Services, LLC
By:________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Co - CEO
Torrey Associates, LLC.
By:________________________________
Name: Xxxxx Xxxxxx
Title: Chairman and CEO
Torrey U.S. Strategy Partners, LLC
By:________________________________
Name: Xxxxx Xxxxxx
Title: Manager
Torrey U.S. Strategy Partners (Offshore), Ltd.
By:________________________________
Name: Xxxxx Xxxxxx
Title: Director
Torrey International Strategy Partners, LLC
By:________________________________
Name: Xxxxx Xxxxxx
Title: Manager
Torrey International Strategy Partners (Offshore), Ltd.
By:________________________________
Name: Xxxxx Xxxxxx
Title: Director
Torrey Multi-Strategy Partners, LLC
By:________________________________
Name: Xxxxx Xxxxxx
Title: Manager
Torrey Multi - Strategy Partners (Offshore), Ltd.
By:________________________________
Name: Xxxxx Xxxxxx
Title: Director
SCHEDULE A
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Operational and Compliance Support Services
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o Implementation of a standardized infrastructure and
record-keeping system to process subscription agreements and
keep investor records;
o Review of subscription agreements to ensure that applicable
legal requirements are complied with and correspond with
investors in the Funds to obtain required representations
from such investors;
o Coordination with the Funds' legal counsel (or other legal
filing service provider) to ensure that all blue sky filings
are made;
o Preparation of documentation required for Board of Manager
meetings.
o Tracking and counting of the Fund's beneficial owners for
purposes of Section 3(c)(1) of the Investment Company Act of
1940, as amended (as applicable to the Funds not registered
as investment companies under such Act);
o Review of investor "new issue" or "hot issue" eligibility and
periodic preparation of reports regarding the same (if
applicable);
o Preparation of tender offer documentation and filings;
o Review of the Funds' offering documentation and material
contracts to identify and address any potential problems;
o Preparation of weekly reports summarizing status and terms of
all material contracts;
o Underlying manager due diligence checks and preparation of
due diligence research reports;
o Attending periodic on-site meetings with Fund Management to
discuss status of operational and compliance issues;
o Preparation and implementation of standardized solicitation
contracts (if any);
o Preparation and implementation of standardized compliance
manuals and internal policy guidelines;
o Review and consultation with respect to investor
correspondence and performance reports;
o Review and consultation with respect to determining whether
any regulatory filings are required;
o Responding to operational and compliance inquiries from the
Funds' investors and potential investors; and
o Acting as principal liaison with regulatory agencies and the
Funds' legal counsel.
Accounting and Administration Support Services
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o Establish, reconcile and maintain the general ledger;
o Reconcile all investor contributions/redemptions;
o Establish, reconcile and maintain investors' capital accounts
(as applicable);
o Calculate NAV of the Funds' shares (as applicable);
o Reconcile the Investment Manager's trades to all clearing and
custodial brokerage accounts;
o Generate the financial statements as of each month end
including the Statement of Financial Position, Statement of
Profit/Loss, and Statement of Changes in Investors' Equity;
o Generate, on a quarterly basis, the Statement of Changes in
Investors Equity for each investor;
o Calculate and generate each partner's share of taxable
income/loss and provide each investor quarterly tax estimates
and annual Schedules K-1 (as applicable);
o Generate and file the Funds' IRS Form 1065 and all
appropriate state tax filings (as applicable);
o Coordinate with the offshore share registrar and transfer
agent the dissemination of the offshore funds' performance
information;
o Coordinate and oversee the annual audit of the Funds'
financial statements;
o Provide the partners with information required by the varied
circumstances of each partner.
SCHEDULE B
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Fees.
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1. Implementation Fees will be payable by each Fund as follows:
Torrey U.S. Strategy Partners, LLC - $10,000
Torrey U.S. Strategy Partners (Offshore), Ltd - $7,500
Torrey International Strategy Partners, LLC - $10,000
Torrey International Strategy Partners (Offshore), Ltd. - $7,500
Torrey Multi-Strategy Partners, LLC - $10,000
Torrey Multi-Strategy Partners (Offshore), Ltd. - $7,500
2. Annual asset based fee calculated with respect to the Funds' total
assets (in the aggregate) as follows:
When assets are between $0 and $100 million - 20 bps per annum
When assets are greater than $100 million but less than $200 million -
22.5 bps per annum
When assets are greater that $200 million - 25 bps per annum
This fee is payable quarterly in advance by the Funds. The amount of
the fee payable as of the beginning of any quarter is determined based upon a
measurement of each Fund's assets as of the first day of such quarter. Fees for
periods of less than a full quarter will be pro rated.
Expense Reimbursements.
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The Funds will reimburse C&M for all reasonable out-of-pocket expenses
(including travel and lodging) related to services directly provided to the
Funds or Fund Management. Such reimbursable expenses include a quarterly fee of
$250 per Fund to cover research-related computer fees incurred in connection
with providing due diligence research and reporting services to the Funds.
Reimbursements will be billed monthly.
SCHEDULE C
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Torrey U.S. Strategy Partners, LLC
Torrey U.S. Strategy Partners (Offshore), Ltd.
Torrey International Strategy Partners, LLC
Torrey International Strategy Partners (Offshore), Ltd.
Torrey Multi-Strategy Partners, LLC
Torrey Multi-Strategy Partners (Offshore), Ltd.
80350.0024 #330024
